| SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES |
NOTE 2 - SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICESThe Management of the Company is responsible for the selection and use ofappropriate accounting policies and the appropriateness of accounting policiesand their application. Critical accounting policies and practices are those thatare both most important to the portrayal of the Company's financial conditionand results and require management's most difficult, subjective, or complexjudgments, often as a result of the need to make estimates about the effects ofmatters that are inherently uncertain. The Company's significant and criticalaccounting policies and practices are disclosed below as required by generallyaccepted accounting principles.BASIS OF PRESENTATIONThe Company's financial statements have been prepared in accordance withaccounting principles generally accepted in the United States of America ("U.S.GAAP").The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date(s)of the financial statements and the reported amounts of revenues and expensesduring the reporting period(s).Critical accounting estimates are estimates for which (a) the nature of theestimate is material due to the levels of subjectivity and judgment necessary toaccount for highly uncertain matters or the susceptibility of such matters tochange and (b) the impact of the estimate on financial condition or operatingperformance is material. The Company's critical accounting estimate(s) andassumption(s) affecting the financial statements was (were): (i) ASSUMPTION AS A GOING CONCERN: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. (ii) VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS: Management assumes that the realization of the Company's net deferred tax assets resulting from its net operating loss ("NOL") carry-forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.These significant accounting estimates or assumptions bear the risk of changedue to the fact that there are uncertainties attached to these estimates orassumptions, and certain estimates or assumptions are difficult to measure orvalue.Management bases its estimates on historical experience and on variousassumptions that are believed to be reasonable in relation to the financialstatements taken as a whole under the circumstances, the results of which formthe basis for making judgments about the carrying values of assets andliabilities that are not readily apparent from other sources.Management regularly evaluates the key factors and assumptions used to developthe estimates utilizing currently available information, changes in facts andcircumstances, historical experience and reasonable assumptions. After suchevaluations, if deemed appropriate, those estimates are adjusted accordingly.Actual results could differ from those estimates.FAIR VALUE OF FINANCIAL INSTRUMENTSThe Company follows paragraph 825-10-50-10 of the FASB Accounting StandardsCodification for disclosures about fair value of its financial instruments andparagraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph820-10-35-37") to measure the fair value of its financial instruments. Paragraph820-10-35-37 establishes a framework for measuring fair value in generallyaccepted accounting principles ("GAAP"), and expands disclosures about fairvalue measurements. To increase consistency and comparability in fair valuemeasurements and related disclosures, Paragraph 820-10-35-37 establishes a fairvalue hierarchy which prioritizes the inputs to valuation techniques used tomeasure fair value into three (3) broad levels. The fair value hierarchy givesthe highest priority to quoted prices (unadjusted) in active markets foridentical assets or liabilities and the lowest priority to unobservable inputs.The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37are described below:Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.Financial assets are considered Level 3 when their fair values are determinedusing pricing models, discounted cash flow methodologies or similar techniquesand at least one significant model assumption or input is unobservable.The fair value hierarchy gives the highest priority to quoted prices(unadjusted) in active markets for identical assets or liabilities and thelowest priority to unobservable inputs. If the inputs used to measure thefinancial assets and liabilities fall within more than one level describedabove, the categorization is based on the lowest level input that is significantto the fair value measurement of the instrument.The carrying amounts of the Company's financial assets and liabilities, such ascash and accounts payable approximate their fair values because of the shortmaturity of these instruments.Transactions involving related parties cannot be presumed to be carried out onan arm's-length basis, as the requisite conditions of competitive, free-marketdealings may not exist. Representations about transactions with related parties,if made, shall not imply that the related party transactions were consummated onterms equivalent to those that prevail in arm's-length transactions unless suchrepresentations can be substantiated.Following table lists assets and liabilities measured and recognized at fairmarket value as of: Fair Value Measurement at December 31, 2015 ------------------------------------------- Level 1 Level 2 Level 3 -------- -------- --------ASSETS Cash and Cash Equivalents $ 1,804 $ -- $ -- -------- -------- -------- TOTAL ASSETS 1,804 -- -- -------- -------- --------LIABILITIES Note Payable - Related Party 9,000 -- -- -------- -------- -------- TOTAL LIABILITIES 9,000 -- -- -------- -------- -------- $ (7,196) $ -- $ -- ======== ======== ======== Fair Value Measurement at June 30, 2015 ------------------------------------------- Level 1 Level 2 Level 3 -------- -------- --------ASSETSCash and Cash Equivalents $ 11,284 $ -- $ -- -------- -------- -------- TOTAL ASSETS 11,284 -- -- -------- -------- --------LIABILITIESNote Payable - Related Party 5,000 -- -- -------- -------- -------- TOTAL LIABILITIES 5,000 -- -- -------- -------- -------- $ 6,284 $ -- $ -- ======== ======== ========CASH EQUIVALENTSThe Company considers all highly liquid investments with maturities of threemonths or less at the time of purchase to be cash equivalents.PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment are stated at cost less accumulated depreciationand impairment. Depreciation on property, plant and equipment is calculated onthe straight-line method after taking into account their respective estimatedresidual values over the estimated useful lives of the assets as follows: Office equipment 3 years Tools and equipment 5 yearsMaintenance and repair costs are expensed as incurred, whereas significantrenewals and betterments are capitalized.Property, Plant and Equipment schedule as of December 31, 2015 and June 30,2015, respectively: December 31, June 30, 2015 2015 -------- --------Office equipment * Cost $ 688 $ 688 * Depreciation (175) (115) -------- -------- * Net 513 573 -------- --------Tools and equipment * Cost 787 787 * Depreciation (113) (26) -------- -------- * Net 674 761 -------- --------TOTAL $ 1,187 $ 1,334 ======== ========RELATED PARTIESThe Company follows subtopic 850-10 of the FASB Accounting StandardsCodification for the identification of related parties and disclosure of relatedparty transactions.Pursuant to Section 850-10-20 the related parties include (a) affiliates of theCompany ("Affiliate" means, with respect to any specified Person, any otherPerson that, directly or indirectly through one or more intermediaries,controls, is controlled by or is under common control with such Person, as suchterms are used in and construed under Rule 405 under the Securities Act); (b)entities for which investments in their equity securities would be required,absent the election of the fair value option under the Fair Value OptionSubsection of Section 825-10-15, to be accounted for by the equity method by theinvesting entity; (c) trusts for the benefit of employees, such as pension andprofit-sharing trusts that are managed by or under the trusteeship ofmanagement; (d) principal owners of the Company; (e) management of the Company;(f) other parties with which the Company may deal if one party controls or cansignificantly influence the management or operating policies of the other to anextent that one of the transacting parties might be prevented from fullypursuing its own separate interests; and (g) other parties that cansignificantly influence the management or operating policies of the transactingparties or that have an ownership interest in one of the transacting parties andcan significantly influence the other to an extent that one or more of thetransacting parties might be prevented from fully pursuing its own separateinterests.The financial statements shall include disclosures of material related partytransactions, other than compensation arrangements, expense allowances, andother similar items in the ordinary course of business. However, disclosure oftransactions that are eliminated in the preparation of consolidated or combinedfinancial statements is not required in those statements. The disclosures shallinclude: (a) the nature of the relationship(s) involved; (b) a description ofthe transactions, including transactions to which no amounts or nominal amountswere ascribed, for each of the periods for which income statements arepresented, and such other information deemed necessary to an understanding ofthe effects of the transactions on the financial statements; (c) the dollaramounts of transactions for each of the periods for which income statements arepresented and the effects of any change in the method of establishing the termsfrom that used in the preceding period; and (d) amounts due from or to relatedparties as of the date of each balance sheet presented and, if not otherwiseapparent, the terms and manner of settlement.COMMITMENT AND CONTINGENCIESThe Company follows subtopic 450-20 of the FASB Accounting StandardsCodification to report accounting for contingencies. Certain conditions mayexist as of the date the financial statements are issued, which may result in aloss to the Company but which will only be resolved when one or more futureevents occur or fail to occur. The Company assesses such contingent liabilities,and such assessment inherently involves an exercise of judgment. In assessingloss contingencies related to legal proceedings that are pending against theCompany or unasserted claims that may result in such proceedings, the Companyevaluates the perceived merits of any legal proceedings or unasserted claims aswell as the perceived merits of the amount of relief sought or expected to besought therein.If the assessment of a contingency indicates that it is probable that a materialloss has been incurred and the amount of the liability can be estimated, thenthe estimated liability would be accrued in the Company's financial statements.If the assessment indicates that a potential material loss contingency is notprobable but is reasonably possible, or is probable but cannot be estimated,then the nature of the contingent liability, and an estimate of the range ofpossible losses, if determinable and material, would be disclosed.Loss contingencies considered remote are generally not disclosed unless theyinvolve guarantees, in which case the guarantees would be disclosed. Managementdoes not believe, based upon information available at this time, that thesematters will have a material adverse effect on the Company's financial position,results of operations or cash flows. However, there is no assurance that suchmatters will not materially and adversely affect the Company's business,financial position, and results of operations or cash flows.The Company did not have any commitments or contingencies as of December 31,2015 and June 30, 2015.REVENUE RECOGNITIONThe Company follows paragraph 605-10-S99-1 of the FASB Accounting StandardsCodification for revenue recognition. The Company recognizes revenue when it isrealized or realizable and earned. The Company considers revenue realized orrealizable and earned when all of the following criteria are met: (i) persuasiveevidence of an arrangement exists, (ii) the product has been shipped or theservices have been rendered to the customer, (iii) the sales price is fixed ordeterminable and (iv)collectability is reasonably assured.INCOME TAX PROVISIONThe Company accounts for income taxes under Section 740-10-30 of the FASBAccounting Standards Codification. Deferred income tax assets and liabilitiesare determined based upon differences between the financial reporting and taxbases of assets and liabilities and are measured using the enacted tax rates andlaws that will be in effect when the differences are expected to reverse.Deferred tax assets are reduced by a valuation allowance to the extentmanagement concludes it is more likely than not that the assets will not berealized. Deferred tax assets and liabilities are measured using enacted taxrates expected to apply to taxable income in the years in which those temporarydifferences are expected to be recovered or settled. The effect on deferred taxassets and liabilities of a change in tax rates is recognized in the statementsof operations in the period that includes the enactment date.The Company adopted section 740-10-25 of the FASB Accounting StandardsCodification ("Section 740-10-25"). Section 740-10-25 addresses thedetermination of whether tax benefits claimed or expected to be claimed on a taxreturn should be recorded in the financial statements. Under Section 740-10-25,the Company may recognize the tax benefit from an uncertain tax position only ifit is more likely than not that the tax position will be sustained onexamination by the taxing authorities, based on the technical merits of theposition. The tax benefits recognized in the financial statements from such aposition should be measured based on the largest benefit that has a greater thanfifty percent (50%) likelihood of being realized upon ultimate settlement.Section 740-10-25 also provides guidance on de-recognition, classification,interest and penalties on income taxes, accounting in interim periods andrequires increased disclosures.The estimated future tax effects of temporary differences between the tax basisof assets and liabilities are reported in the accompanying balance sheets, aswell as tax credit carry-backs and carry-forwards. The Company periodicallyreviews the recoverability of deferred tax assets recorded on its balance sheetsand provides valuation allowances as management deems necessary.Management makes judgments as to the interpretation of the tax laws that mightbe challenged upon an audit and cause changes to previous estimates of taxliability. In addition, the Company operates within multiple taxingjurisdictions and is subject to audit in these jurisdictions. In management'sopinion, adequate provisions for income taxes have been made for all years. Ifactual taxable income by tax jurisdiction varies from estimates, additionalallowances or reversals of reserves may be necessary.UNCERTAIN TAX POSITIONSThe Company did not take any uncertain tax positions and had no adjustments toits income tax liabilities or benefits pursuant to the provisions of Section740-10-25 for the period from April 17, 2014 (inception) through December 31,2015.NET INCOME (LOSS) PER COMMON SHARENet income (loss) per common share is computed pursuant to section 260-10-45 ofthe FASB Accounting Standards Codification. Basic net income (loss) per commonshare is computed by dividing net income (loss) by the weighted average numberof shares of common stock outstanding during the period. Diluted net income(loss) per common share is computed by dividing net income (loss) by theweighted average number of shares of common stock and potentially dilutiveoutstanding shares of common stock during the period to reflect the potentialdilution that could occur from common shares issuable through contingent sharearrangements, stock options and warrants.There were no potentially dilutive common shares outstanding for the periodsended December 31, 2015 or 2014.CASH FLOWS REPORTINGThe Company adopted paragraph 230-10-45-24 of the FASB Accounting StandardsCodification for cash flows reporting, classifies cash receipts and paymentsaccording to whether they stem from operating, investing, or financingactivities and provides definitions of each category, and uses the indirect orreconciliation method ("Indirect method") as defined by paragraph 230-10-45-25of the FASB Accounting Standards Codification to report net cash flow fromoperating activities by adjusting net income to reconcile it to net cash flowfrom operating activities by removing the effects of (a) all deferrals of pastoperating cash receipts and payments and all accruals of expected futureoperating cash receipts and payments and (b) all items that are included in netincome that do not affect operating cash receipts and payments. The Companyreports the reporting currency equivalent of foreign currency cash flows, usingthe current exchange rate at the time of the cash flows and the effect ofexchange rate changes on cash held in foreign currencies is reported as aseparate item in the reconciliation of beginning and ending balances of cash andcash equivalents and separately provides information about investing andfinancing activities not resulting in cash receipts or payments in the periodpursuant to paragraph 830-230-45-1 of the FASB Accounting StandardsCodification.SUBSEQUENT EVENTSThe Company follows the guidance in Section 855-10-50 of the FASB AccountingStandards Codification for the disclosure of subsequent events. The Company willevaluate subsequent events through the date when the financial statements wereissued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification,the Company as an SEC filer considers its financial statements issued when theyare widely distributed to users, such as through filing them on EDGAR.RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTSOn June 10, 2014, the Financial Accounting Standards Board ("FASB") issuedupdate ASU 2014-10, Development Stage Entities (Topic 915). Amongst otherthings, the amendments in this update removed the definition of developmentstage entity from Topic 915, thereby removing the distinction betweendevelopment stage entities and other reporting entities from US GAAP. Inaddition, the amendments eliminate the requirements for development stageentities to (1) present inception-to-date information on the statements ofincome, cash flows and shareholders equity, (2) label the financial statementsas those of a development stage entity; (3) disclose a description of thedevelopment stage activities in which the entity is engaged and (4) disclose inthe first year in which the entity is no longer a development stage entity thatin prior years it had been in the development stage. The amendments areeffective for annual reporting periods beginning after December 31, 2014 andinterim reporting periods beginning after December 15, 2015, however entitiesare permitted to early adopt for any annual or interim reporting period forwhich the financial statements have yet to be issued. The Company has elected toearly adopt these amendments and accordingly have not labeled the financialstatements as those of a development stage entity and have not presentedinception-to-date information on the respective financial statements.
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