2.4.0.80009 - Disclosure - Summary of Significant Accounting Policiestruefalsefalse1false falsefalseFrom2012-09-01to2013-05-31http://www.sec.gov/CIK0001439237duration2012-09-01T00:00:002013-05-31T00:00:001true 1ADGS_NotesToFinancialStatementsAbstractADGS_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0Notes to Financial Statements2false 2us-gaap_SignificantAccountingPoliciesTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00Basis of presentation   The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they may not include all of the information and footnotes required by GAAP for complete consolidated financial statements.  All adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation of the consolidated financial statements have been included. The results of operation for the three months and nine months ended May 31, 2013, are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.   The preparation of the condensed consolidated financial statements in accordance with US GAAP requires management of the Company to make a number of 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 year. Significant items subject to such estimates and assumptions include the recoverability of the carrying amount and the estimated useful lives of long-lived assets; valuation allowances for receivables, realizable values for inventories. Actual results could differ from those estimates.   The condensed consolidated financial statements include all accounts of the Company and its subsidiary as disclosed in note 1.  All material inter-company balances and transactions have been eliminated.   As both the Company and its subsidiaries, ADGS and ADGS Tax are under common control, the financial statements of the Company have been presented as if the receipt of assets and liabilities of the subsidiaries at their net carrying amount been entered into as of March 1, 2011 in accordance with ASC 805-50-15-6. Accordingly, financial information related to periods prior to the assets and liabilities are that of the Companys operating subsidiaries.   Going concern   The accompanying unaudited condensed consolidated financial statements are presented on a going concern basis.  At May 31, 2013, the Company had a working capital surplus of $1,196,008 and net liabilities of $255,695.  The Company generated a net profit of $96,988 during the three-month period ended May 31, 2013 (a net profit of $3,486 for the three-month period ended May 31, 2012); a net profit of $454,810 during the nine-month period ended May 31, 2013 (a net loss of $128,786 for the nine-month period ended May 31, 2012).  These conditions raise substantial doubt about the Companys ability to continue as a going concern.  The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management plans to continue its efforts to raise funds through debt or equity in the near future to sustain its operations.   Foreign currency translation   The Group uses United States dollars (U.S. Dollar or US$ or $) for financial reporting purposes. The subsidiary within the Company maintain its books and records in their respective functional currency, Hong Kong dollars (HK$), being the lawful currency in Hong Kong, respectively. Assets and liabilities of the subsidiary are translated from H.K. Dollars into U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of income and comprehensive income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Companys financial statements are recorded as accumulated other comprehensive income included in the stockholders equity section of the balance sheets. The exchange rates used to translate amounts in HKD into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 67%"> </td> <td style="width: 16%; border-bottom: black 1.5pt solid"> May 31, 2013</td> <td style="width: 1%"> </td> <td style="width: 16%; border-bottom: black 1.5pt solid"> August 31, 2012</td></tr> <tr style="vertical-align: top"> <td> </td> <td style="text-align: center">(Unaudited)</td> <td> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td>Balance sheet items, except for equity accounts</td> <td style="text-align: center">HK$7.7987=$1</td> <td> </td> <td style="text-align: center">HK$7.800=$1</td></tr> <tr> <td style="vertical-align: top"> </td> <td style="vertical-align: bottom; text-align: center"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: center"> </td></tr> <tr style="vertical-align: top"> <td> </td> <td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center">For the Nine Months Ended May 31,</td></tr> <tr style="vertical-align: top"> <td> </td> <td style="border-bottom: black 1.5pt solid; text-align: center">2013</td> <td> </td> <td style="border-bottom: black 1.5pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: top"> <td> </td> <td colspan="3" style="text-align: center">(Unaudited)</td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td>Items in statements of income and cash flows</td> <td style="text-align: center">HK$7.7993=$1</td> <td> </td> <td style="text-align: center">HK$7.7994=$1</td></tr> <tr style="vertical-align: top"> <td> </td> <td style="text-align: center"> </td> <td> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: top"> <td> </td> <td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center">For the Three Months Ended May 31,</td></tr> <tr style="vertical-align: top"> <td> </td> <td style="border-bottom: black 1.5pt solid; text-align: center">2013</td> <td> </td> <td style="border-bottom: black 1.5pt solid; text-align: center">2012</td></tr> <tr style="vertical-align: top"> <td> </td> <td colspan="3" style="text-align: center">(Unaudited)</td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td>Items in statements of income and cash flows</td> <td style="text-align: center">HK$7.7991=$1</td> <td> </td> <td style="text-align: center">HK$7.7997=$1</td></tr> </table>   Revenue recognition   Revenue is recognized when persuasive evidence of an arrangement exists, the related services are provided and the collection of the revenue is probable, the price is fixed or determinable and collectability is reasonably assured.  The Group generates its revenues from providing professional services under fixed-fee billing arrangements.   In fixed-fee billing arrangements, the Group agrees to a pre-established fee in exchange for a pre-determined set of professional services. Generally, the client agrees to pay a fixed-fee every month over the specified contract term. These contracts are for varying periods and generally permit the client to cancel the contract before the end of the term.    Direct cost of revenue   Direct cost of revenues consists primarily of billable employee compensation and related payroll benefits, the cost of consultants assigned to revenue generating activities and direct expenses billable to clients.  Direct cost of revenues does not include an allocation of overhead costs.   Cash   Cash represents cash in banks and cash on hand.   The Group considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Substantially all of the cash deposits of the Group are held with financial institutions located in the Hong Kong, PRC. Management believes these financial institutions are of high credit quality. The group held no cash equivalents at August 31, 2012 or May 31, 2013.  Restricted cash is the deposit pledged to the banks for additional banking facilities.   Accounts receivable   Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts and discounts. The allowance for doubtful accounts is the Groups best estimate of the amount of probable credit losses in the Groups existing accounts receivable. Management determines the allowance based on historical write-off experience, customer specific facts and economic conditions.  The Group has historically been able to collect all of its receivable balances.   Outstanding account balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance-sheet credit exposure to its customers.   Property and equipment   Property and equipment are recorded at cost less accumulated depreciation. Maintenance, repairs and minor renewals are expensed as incurred; major renewals and improvements that extend the lives or increase the capacity of plant assets are capitalized.   When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the reporting period of disposition.   Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value.   The estimated useful lives of the assets are as follows:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="width: 80%"> </td> <td style="width: 20%; border-bottom: black 1.5pt solid; text-align: center"> Estimated Life</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Leasehold improvement</td> <td style="text-align: center">5 years</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Furniture and fixtures</td> <td style="text-align: center">5 years</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td>Office equipment</td> <td style="text-align: center">5 years</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Motor vehicles</td> <td style="text-align: center">5 years</td></tr> </table>    Equity-method investment   Affiliated companies, in which the Company has significant influence, but not control, are accounted for equity-method investment. Equity-method investment adjustments include the Companys proportionate share of investee income or loss, gains or losses resulting from investee capital transactions, adjustments to recognize certain differences between the Companys carrying value and the Companys equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. Gain or losses are realized when such investments are sold.   Non-controlling interest   Non-controlling interests represents the 20% interest in ADGS TAX not owned by Almonds Kisses.   Purchased intangible assets and goodwill   The Group assesses the useful lives and possible impairment of existing recognized intangible assets when an event occurs that may trigger such a review.  Factors considered important which could trigger a review include:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 100%; text-indent: 0.25in">- significant underperformance relative to historical or projected future operating results;</td></tr> <tr style="vertical-align: top"> <td style="text-indent: 0.25in">- significant changes in the manner of use of the acquired assets or the strategy for our overall business;</td></tr> <tr style="vertical-align: top"> <td style="text-indent: 0.25in">- identification of other impaired assets within a reporting unit;</td></tr> <tr style="vertical-align: top"> <td style="text-indent: 0.25in">- disposition of a significant portion of an operating segment;</td></tr> <tr style="vertical-align: top"> <td style="text-indent: 0.25in">- significant negative industry or economic trends;</td></tr> </table>   The intangible assets are amortized using the straight line method over a period of 10 years.   Assets under capital lease   Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease.  The interest element of the finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Depreciation expense is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease.   Comprehensive income   Comprehensive income includes net income and also considers the effect of other changes to stockholders' equity that are not included in the determination of net income, but rather are reported as a separate component of stockholders' equity.  The Group reports foreign currency translation adjustments and unrealized gains and losses on investments (those which are considered temporary) as components of comprehensive income.   Earnings per share   Basic earnings per share is computed on the basis of the weighted-average number of shares of the Companys common stock outstanding during the fiscal years. Diluted earnings per share is computed on the basis of the weighted-average number of shares of the common stock plus any effect of dilutive potential common shares outstanding during the period using the if-converted method.   Income taxes   The Group accounts for income taxes under FASB ASC Topic 740 "Income Taxes". Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be effective when the differences are expected to reverse.   Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date.   The Group records uncertain tax positions when it is more likely than not that the tax positions will not be sustained.   The Group recognizes interest and penalty related to income tax matters as income tax expense. As of May 31, 2013 and 2012, there was no penalty or interest recognized as income tax expenses.   Employee benefits   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 72px; text-align: right">i)  </td> <td style="text-align: justify">Salaries, wages, annual bonuses, paid annual leave and staff welfare are accrued in the year in which the associated services are rendered by employees of the Group.  Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values.</td></tr> <tr style="vertical-align: top"> <td style="text-align: right">ii)  </td> <td style="text-align: justify">Contributions to appropriate local contribution retirement schemes pursuant to the relevant labor rules and regulations in Hong Kong which are charged to the cost of sales and general and administrative expenses in the statement of operation as and when the related employee service is provided.  The Group incurred $3,290 and $2,174 for the three months period ended May 31, 2013 and 2012; $18,295 and $11,021 for the nine months period ended May 31, 2013 and 2012 respectively.</td></tr> </table>   Temporary receipts   Temporary receipts are the balances realized by the Group in the position as appointed liquidator from the companies which are in the process of liquidation and are temporarily kept with the Group.   Fair value measurements   FASB ASC Topic 820, Fair Value Measurement and Disclosures defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements.  Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date.  In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value FASB ASC Topic 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability.  These inputs are further defined as observable and unobservable inputs.  Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Group.  Unobservable inputs reflect the Groups assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.   The fair value hierarchy is categorized into three levels based on the inputs as follows:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 36px"> </td> <td style="width: 72px">Level 1 -</td> <td style="text-align: justify">Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Group has the ability to access.  Valuation adjustments and block discounts are not being applied.  Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 36px"> </td> <td style="width: 72px">Level 2 -</td> <td style="text-align: justify">Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 36px"> </td> <td style="width: 72px">Level 3 -</td> <td style="text-align: justify">Valuations based on inputs that are unobservable and significant to the overall fair value measurement.</td></tr> </table>   The Groups financial instruments consist principally of cash, accounts receivable, accounts payable, bank loans and accrued liabilities. None of which are held for trading purposes. Pursuant to ASC 820, the fair value of the Group's cash is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. The Group believes that the carrying amounts of all of the Group's other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for all significant accounting policies of the reporting entity.Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18726-107790 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 22 -Paragraph 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18861-107790 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18743-107790 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18854-107790 false0Note 2. 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