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Variable Interest Entity and Guarantee
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6 Months Ended |
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Sep. 30, 2013
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| Guarantees [Abstract] | |
| Equity Method Investment [Text Block] |
Variable Interest Entity and Guarantee
The Company, through Kentrox Inc., has a 50% equity ownership in AccessTel Kentrox Australia PTY LTD ("AKA"). AKA distributes network management solutions provided by the Company and the other 50% owner to one customer. The Company holds equal voting control with the other owner. All actions of AKA are decided at the board level by majority vote. The Company evaluated ASC topic 810, Consolidations, and concluded that AKA is a variable interest entity ("VIE"). The Company has concluded that it is not the primary beneficiary of AKA and has therefore determined that consolidation is not required.
The Company has $1.1 million of accounts receivables due from AKA and $0.9 million of deferred revenue relating to maintenance contracts due to AKA as of September 30, 2013. The Company also has a guarantee for the performance of the other 50% owner in AKA, who primarily provides support and engineering services to the customer. The guarantee will stay in place as long as the contract between AKA and the customer is in place. The Company would have recourse against the other 50% owner in AKA in the event the guarantee is triggered. The Company is in the process of evaluating the fair value of the liability in conjunction with the Kentrox purchase accounting. The Company's exposure to loss as a result of its involvement with AKA, exclusive of lost profits, is limited to the items noted above.
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