Note 10 - Foreign Currency Translation

12 Months Ended

Dec. 31, 2010

Note 10 - Foreign Currency Translation:

Note 10 - Foreign Currency Translation

NOTE 10 – FOREIGN CURRENCY TRANSLATION

During the years ended June 30, 2012 and 2011, the Company has transacted the majority of its business activities in Germany, and the transactions have been primarily consummated in the Euro currency.  Due to the fact that the Company’s functional currency is the Euro and its reporting currency is the U.S. dollar, the Company must recognize the effects of variations in foreign currency exchange rates as gains and losses as a component of other comprehensive income (loss), pursuant to ASC 830 “Foreign Currency Translation.” To calculate this other comprehensive income and loss, the Company utilizes the “current method,” whereby assets and liabilities of the German subsidiary are translated from Euro into U.S. dollars at the exchange rate at the balance sheet date. 

All equity items, other than retained earnings, are specifically identified where possible and exchange rates on transaction dates are implemented.  Profit and loss accounts are translated using an average rate for the period.  During the years ended June 30, 2012 and 2011, the Company recognized other comprehensive income (loss) of $(17,580) and $131,198, respectively.  Such other comprehensive income (loss) had no effect on liquidity.