Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Notes

Summary of Significant Accounting Policies

3.                    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Company are in accordance with accounting principles generally accepted in the United States. Presented below are those policies considered particularly significant:

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. The accounting estimates that require management’s most significant judgments are the valuation of the intangible asset and measurement of accrued liabilities.

Reclassifications

Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented.

Basis of Consolidation

The accompanying interim consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries, Panacea (a Delaware incorporated Company) and Panacea Global Inc. (a Canadian incorporated Company). All inter-company transactions and balances have been eliminated upon consolidation.

Impairment of Long-lived Assets

In accordance with ASC 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value of asset less cost to sell. The Company evaluated the Global Diagnostic License on September 30, 2014 and noted no impairment.

Foreign Currency Translation

The functional currency of the Company is Canadian dollars. The functional currency of the Company’s subsidiaries is United States dollars. The interim financial statements of the Company have been translated into United States dollars by translating balance sheet accounts at period end exchange rates except for non-current assets which are translated at historical exchange rates, and statement of operations accounts at average exchange rates for the periods. Foreign currency translation gains and losses are reflected in the equity section of the Company’s consolidated balance sheets in Accumulated Other Comprehensive Income (Loss).

Earnings or Loss Per Share

The Company accounts for earnings per share pursuant to ASC 260-10-05, Earnings per Share, which requires disclosure on the financial statements of "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common stock outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each period.  In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive.

Income Taxes

The Company accounts for income taxes pursuant to ASC 740-10, Accounting for Income Taxes. Deferred tax assets and liabilities are recorded for differences between the financial statements and tax basis of the assets and liabilities as well as loss carry forward that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.

Stock-based Compensation

The Company follows ASC 718, Share-Based Payment, which establishes standards for transactions in which an entity exchanges its equity instruments for goods and services. This standard focuses primarily on accounting for transactions in which an entity obtains employee services in stock-based payment transactions, including issuance of stock options to employees. The Company measures stock-based compensation cost at grant date, based on the estimated fair value of the award, and recognizes the cost as expense (net of estimated forfeitures) over the expected service period. The Company estimates the fair value of stock options using the Black-Scholes valuation model.

Investment in Equity Instruments

The Company has accounted for its investment in equity and debt securities using the equity method of accounting based on the guidelines established in FASB ASC 323. In applying the guidance of FASB ASC 323, the Company recognizes the investment in stock of an investee as an asset. The asset is recorded initially at cost in accordance with the guidance in FASB ASC 805-50-30. The Company will recognize its share of the earnings or losses of an investee in the periods for which they are reported by the investee in its financial statements. The Company adjusts the carrying value of the investment for its share of the earnings or losses of the investee after the date of investment and shall report the recognized earnings or losses in the consolidated statements of operations.

Subsequent Events

The Company has evaluated all transactions through the financial statement issuance date for subsequent event disclosure consideration.

Recent Accounting Pronouncements

The Company has assessed the applicability and impact of all recently issued accounting pronouncements and they have been determined to be either not applicable or are expected to have minimal impact on the Company’s consolidated financial position, results of operations, or cash flows.