2.4.0.8102 - Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIEStruefalsefalse1false falsefalsefrom-2012-10-01-to-2013-06-30.1650.0.0.0.0.0.0.0http://www.sec.gov/CIK0000314712duration2012-10-01T00:00:002013-06-30T00:00:001true 1us-gaap_AccountingPoliciesAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]2false 2us-gaap_SignificantAccountingPoliciesTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00<div> <div> NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Revenue Recognition   Revenues from the sales of RoboticValet and rack and rail systems are recognized using the percentage of completion method, whereby revenue and the related gross profit is determined by comparing the actual costs incurred to date for the project to the total estimated project costs at completion.   Project costs generally include all material and shipping costs, our direct labor, subcontractor costs and an allocation of indirect costs related to the direct labor. Changes in the project scope, site conditions, staff performance and delays or problems with the equipment used on the project can result in increased costs that may not be billable or accepted by the customer and a loss or lower profit from what was originally anticipated at the time of the proposal.   Estimates for the costs to complete the project are periodically updated by management during the performance of the project. Provisions for changes in estimated costs and losses, if any, on uncompleted projects are made in the period in which such losses are determined.   When the current estimate of total contract costs exceeds the current estimate of total contract revenues, a provision for the entire loss on the contract is made.  Losses are recognized in the period in which they become evident under the percentage-of-completion method.  The loss is computed on the basis of the total estimated costs to complete the contract, including the contract costs incurred to date plus the estimated costs to complete.   Revenues of $564,236 and $477,290 have been recognized for the nine months ended June 30, 2013 and 2012, respectively and $275,002 and $96,512 for the three months ended June 30, 2013 and 2012, respectively.   The Company may have service contracts in the future after the contract warranty period is expired, which are separate and distinct agreements from project agreements and will be billed according to the terms of the contract.    Principles of Consolidation   The accompanying consolidated financial statements include the accounts of Boomerang Systems, Inc. and the accounts of all majority-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.   Cash and Equivalents   For purposes of the statement of cash flows, we consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.   Earnings per Common Share   We adopted ASC 260. The statement established standards for computing and presenting earnings per share ("EPS"). It replaced the presentation of primary EPS with a basic EPS and also requires dual presentation of basic and diluted EPS on the face of the income statement. Basic income/(loss) per share was computed by dividing our net income/(loss) by the weighted average number of common shares outstanding during the period. The weighted average number of common shares used to calculate basic and diluted income/(loss) per common share for the nine months ended June 30, 2013 and 2012 were 7,573,416 and 7,305,825, and for the three months ended June 30, 2013 and 2012 were 7,689,773 and 7,354,554, respectively.  The Company's common stock equivalents, of outstanding options, warrants and convertible notes, have not been included as to include them would be anti-dilutive. As of June 30, 2013 and 2012, there were fully vested options outstanding for the purchase of 641,385 and 641,385 common shares, warrants for the purchase of 9,893,203 and 8,472,266 common shares, and notes convertible into 4,668,831 and 3,735,206 common shares, respectively, all of which could potentially dilute future earnings per share.   Stock-Based Compensation   The analysis and computation was performed based on our adoption of ASC 718-10-25, which requires the recognition of the fair value of stock-based compensation.  For the nine months ended June 30, 2013 and 2012, we conducted an outside independent analysis and our own review, and based on the results, we recognized $16,863 and $472,399 in share-based payments related to non-vested stock options that were issued from fiscal year 2008 through 2010, respectively, and $0 and $114,715 for the three months ended June 30, 2013 and 2012, respectively. We recognized $0 and $680,554 for the issuance of warrants during the nine months ended June 30, 2013 and 2012, respectively, and $0 and $96,352 for the three months ended June 30, 2013 and 2012, respectively. We also recognized $0 and $50,001 for the issuance of common stock for services during the nine months ended June 30, 2013 and 2012, respectively, and $0 and $50,001 for the three months ended June 30, 2013 and 2012, respectively.   Derivative liability   The Company accounts for reset provisions in connection with their issuance of debt, and reset provisions of equity instruments attached to their debt, in accordance with Emerging Issues Task Force ("EITF") Consensus No. 07-5 "Determining Whether an Instrument (or Embedded Feature) is indexed to an Entity's Own Stock" (EITF 07-5"). Under EITF 07-5, instruments which contain full ratchet anti-dilution provisions are no longer considered indexed to a company's own stock for purposes of determining whether it meets the first part of the scope exception in paragraph 11 (a) of FASB 133 "Accounting for Derivative Instruments and Hedging Activities", now promulgated in ASC 815, "Derivative and Hedging". Under ASC 815 the Company is required to (1) evaluate an instrument's contingent exercise provisions and (2) evaluate the instrument's settlement provisions.   Fair Value Measurements   As defined in FASB ASC Topic 820 - 10, "Fair Value Measurements and Disclosures," fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic 820 - 10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories:   <table style="FONT: 10pt Times New Roman, Times, Serif; WIDTH: 100%" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt; WIDTH: 96px">Level 1:</td> <td style="FONT-SIZE: 10pt">Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.</td> </tr> </table>   <table style="FONT: 10pt Times New Roman, Times, Serif; WIDTH: 100%" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt; WIDTH: 96px">Level 2:</td> <td style="FONT-SIZE: 10pt">Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.</td> </tr> </table>   <table style="FONT: 10pt Times New Roman, Times, Serif; WIDTH: 100%" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="FONT-SIZE: 10pt; WIDTH: 96px">Level 3:</td> <td style="FONT-SIZE: 10pt">Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company's valuation models are primarily industry standard models. Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.</td> </tr> </table>   As required by FASB ASC Topic 820 - 10, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.   The estimated fair value of the derivative liability was calculated using the Black-Scholes option pricing model. The Company uses Level 3 inputs to value its derivative liabilities. The following table provides a reconciliation of the beginning and ending balances for the major classes of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) and reflects gains and losses for the nine months and one year ended June 30, 2013 and September 30, 2012, respectively, for all financial assets and liabilities categorized as Level 3.   <table style="BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.25in; WIDTH: 95%" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">June 30, 2013</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">September 30, 2012</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center" colspan="2" nowrap="nowrap"> (Unaudited)</td> <td nowrap="nowrap"> </td> <td nowrap="nowrap"> </td> <td colspan="2" nowrap="nowrap"> </td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td>Liabilities:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 74%">Balance of derivative liabilities - beginning of period</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">13,069,663</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">-</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left">Initial recording of derivative liability</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">-</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">10,831,922</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">Change in fair value of derivative liabilities</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">  </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (1,055,315</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">  </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 2,237,741</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt">Balance of derivative liabilities - end of period</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 12,014,348</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 13,069,663</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table>   The Company incurred the derivative liability set forth on the June 30, 2013 balance sheet in connection with the 2011 Offering (see Note 8).   Research and Development   Pursuant to ASC 730, Research and Development, research and development costs are expensed as incurred. Research and Development expense for the nine months ended June 30, 2013 and 2012 were $2,125,657 and $1,033,435, respectively, and $500,930 and $437,731 for the three months ended June 30, 2013 and 2012, respectively.   Advertising   Advertising costs amounted to $166,929 and $114,783 for the nine months ended June 30, 2013 and 2012, respectively, and $41,636 and $42,944 for the three months ended June 30, 2013 and 2012, respectively. Advertising costs are included in Sales and Marketing and expensed as incurred.   Use of Estimates   Management of the Company has made estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Estimates are used in accounting for, among other items, allowance for doubtful accounts, inventory obsolescence, warranty expense, income taxes and percentage of completion contracts. Actual results could differ from these estimates.   Accounts Receivable and Allowance for Doubtful Accounts   Trade receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts reflects our best estimate of probable credit losses inherent in our existing accounts receivable balance. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We determine this allowance based on known troubled accounts, history and other currently available evidence. The allowance for doubtful accounts was $155,781 and $155,781 at June 30, 2013 and September 30, 2012, respectively.   Investment at Equity   The Company accounts for the equity investment using the equity method unless its value has been determined to be other than temporarily impaired, in which case we write the investment down to its impaired value. The Company reviews this investment periodically for impairment and makes appropriate reductions in carrying value when other-than-temporary decline is evident; however, for non-marketable equity securities, the impairment analysis requires significant judgment. During its review, the Company evaluates the financial condition of the issuer, market conditions, and other factors providing an indication of the fair value of the investment. Adverse changes in market conditions or operating results of the issuer that differ from expectation could result in additional other-than-temporary losses in future periods.     Inventory   Inventory is stated at the lower of cost or market using the weighted average cost method. Inventory includes materials, parts, assemblies and work in process. The Company records an inventory reserve for the anticipated loss associated with slow moving, obsolete and/or damaged inventory.   Property, Plant and Equipment   Property, plant and equipment are stated at cost. Maintenance and repairs are charged to expense as incurred. Costs of major additions and betterments are capitalized. Depreciation is calculated on the straight-line method over the estimated useful lives which range from three years to fifteen years. Depreciation and amortization for the nine months ended June 30, 2013 and 2012 was $305,451 and $183,907, respectively, and $106,209 and $62,410 for the three months ended June 30, 2013 and 2012, respectively.   Warranty Reserves   The Company provides warranty coverage on its products for a specified time as stipulated in its sales contracts.  As revenues for contracts are recognized, the Company will record a warranty reserve for estimated costs in connection with future warranty claims associated with those contracts.  The amount of warranty reserve is based primarily on the estimated number of products under warranty and historical costs to service warranty claims.  Management periodically assesses the adequacy of the reserves based on these factors and adjusts the reserve accordingly.  As of June 30, 2013 and September 30, 2012, the Company accrued a warranty reserve of $0 and $372,940, respectively.   Recent Accounting Pronouncements   A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to the consolidated financial statements of the Company. </div> </div>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 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 4: 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 5: 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 false0SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESfalseSUMMARY OF SIGNIFICANT ACCOUNTING POLICIESUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.boomerangsystems.com/role/SummaryOfSignificantAccountingPolicies12