ADOPTION OF NEW ACCOUNTING PRINCIPLE

3 Months Ended

Mar. 31, 2014

ADOPTION OF NEW ACCOUNTING PRINCIPLE

ADOPTION OF NEW ACCOUNTING PRINCIPLE

NOTE 14 - ADOPTION OF NEW ACCOUNTING PRINCIPLE

The following Updates to the Accounting Standards Codification are effective beginning in the first quarter of 2014:

ASU No. 2013-04: On February 28, 2013, the FASB issued ASU No. 2013-04 “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation is Fixed at the Reporting Date.” The objective of this update is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance (e.g. debt arrangements, other contractual obligations, and settled litigation and judicial rulings) is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP.

The amendments require all entities to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of the following:

· The amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors, and

· Any additional amount the reporting entity expects to pay on behalf of its co-obligors.

It is also required that an entity discloses the nature and amount of the obligation as well as other information about those obligations.

These changes are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013 with early adoption permitted. The Company adopted this guidance in 2014, it did not have material impact on the results and financial condition of the Company.

ASU No. 2013-05: In March 2013, the FASB issued ASU 2013-05 an update of Foreign Currency Matters (Topic 830) to clarify the treatment of cumulative translation adjustments when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. The updated guidance resolves the diversity in practice for the treatment of business combinations achieved in stages in a foreign entity.

These changes are effective prospectively for fiscal years and interim reporting periods within those years beginning after December 15, 2013. The Company adopted this guidance in 2014 and it did not have a material impact on the consolidated financial position of the Company.

ASU No. 2013-11: In July 2013 the FASB issued ASU No. 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (Topic 740 Income Taxes). The updated guidance requires an entity to net its unrecognized tax benefits against the deferred tax assets for all same jurisdiction net operating loss carry forward, a similar tax loss, or tax credit carryforwards. A gross presentation will be required only if such carryforward are not available or would not be used by the entity to settle any additional income tax resulting from disallowance of the uncertain tax position. The update is effective prospectively for fiscal year beginning January 1, 2014. The Company adopted this guidance in the first quarter 2014. See Note 4 Income taxes.