2.4.0.8108 - Disclosure - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIEStruefalsefalse1falsefalsefalseP03_01_2013To05_31_2013http://www.sec.gov/CIK0000049534duration2013-03-01T00:00:002013-05-31T00:00:001true1us-gaap_AccountingPoliciesAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_SignificantAccountingPoliciesTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00 <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0px; MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em> </em></div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em>Basis of Presentation</em>. The accompanying Consolidated Condensed Financial Statements include the accounts of Life Partners and its wholly owned subsidiary, LPI. All significant intercompany balances and transactions have been eliminated in consolidation. The Consolidated Condensed Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“<em>GAAP”</em>). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period in the normal course of business. Actual results inevitably will differ from those estimates and such differences may be material to the financial statements.</div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">These Consolidated Condensed Financial Statements have been prepared without audit, pursuant to the rules and regulations of the SEC, and reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the financial statements and information presented not misleading. These Consolidated Condensed Financial Statements should be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in our most recent Annual Report on Form 10-K.</div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em>Reclassifications</em>. We have made certain reclassifications to prior period amounts to conform to current year presentations.</div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em>Property and Equipment</em>. Our property and equipment are depreciated over their estimated useful lives using the straight-line method. Depreciation expense for the three months ended May 31, 2013 and 2012 (the “<em>First Quarter of this year”</em> and <em>“First Quarter of last year”,</em> respectively) was $52,819 and $62,832, respectively. The useful lives of property and equipment for purposes of computing depreciation are:</div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">  </div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;MARGIN: 0in 0in 0pt; FONT-SIZE: 10pt"> <table style="clear:both;WIDTH: 85%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 57%"> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> <font style="FONT-SIZE: 10pt">Building and components</font></div> </td> <td style="WIDTH: 43%" align="right"> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> <font style="FONT-SIZE: 10pt">7</font> to 39 years</div> </td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify"> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> <font style="FONT-SIZE: 10pt">Machinery and equipment</font></div> </td> <td style="TEXT-ALIGN: right"> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> <font style="FONT-SIZE: 10pt">5</font> to 7 years</div> </td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify"> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> <font style="FONT-SIZE: 10pt">Software</font></div> </td> <td style="TEXT-ALIGN: right"> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> <font style="FONT-SIZE: 10pt">3</font> to 7 years</div> </td> </tr> <tr style="VERTICAL-ALIGN: top"> <td style="TEXT-ALIGN: justify"> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> <font style="FONT-SIZE: 10pt">Transportation equipment</font></div> </td> <td style="TEXT-ALIGN: right"> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> <font style="FONT-SIZE: 10pt">5</font> years</div> </td> </tr> </table> </div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em>Artifacts and Other</em>. The artifacts and other assets are stated at cost. We have evaluated these assets and believe there is no impairment in their value as of May 31, 2013, and February 28, 2013. </div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em>Impairment of Long-Lived Assets</em>. We account for the impairment and disposition of long-lived assets in accordance with ASC 360-10, <em>Accounting for the Impairment or Disposal of Long-Lived Assets.</em> We review the carrying value for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss would be recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on our analysis, Investments in Policies is the only balance sheet item that has been impaired. During the First Quarter of this year and last year, we recorded impairment expense of $11,968 and $671,918, respectively.</div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em> </em></div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em>Revenue Recognition</em>. We recognize income at the time a settlement closes and we defer revenue to cover minor monitoring services provided after the settlement date and amortize this amount over the anticipated life expectancy of the insureds. This amount is shown as Deferred Policy Monitoring Costs within current and long-term liabilities on the Consolidated Balance Sheets.</div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em> </em></div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em>Income Taxes</em>. We recognize deferred tax assets and liabilities for the expected future tax consequences of transactions and events. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Timing differences between the reporting of income and expenses for financial statement and income tax reporting purposes are reported as deferred tax assets, net of valuation allowances, or as deferred tax liabilities depending on the cumulative effect of all timing differences, recorded at amounts expected to be more likely than not recoverable.</div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em> </em></div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em>Earnings Per Share</em>. Basic earnings per share computations are calculated on the weighted-average of common shares and common share equivalents outstanding during the year, reduced by the treasury stock. Common stock options and warrants are considered to be common share equivalents and are used to calculate diluted earnings per common and common share equivalents except when they are anti-dilutive.</div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em> </em></div> <div style="clear:both;FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt;TEXT-INDENT: 0.5in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><em>Concentrations of Credit Risk and Major Customers</em>. In the First Quarter of this year and last year, there was no compensation to any single licensee organization that represented more than 10% of brokerage fees. <font style="FONT-FAMILY: Times New Roman, Times, Serif">For the First Quarter of this year, two brokers who each accounted for more than 10% of the face value of all completed transactions, constituted 92</font>% of the total face value of completed transactions. For the First Quarter of last year, five brokers accounted for more than 10% of the face value of all completed transactions, and constituted 98% <font style="COLOR: black">of the total face value of completed transactions.</font></div> </div> falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for all significant accounting policies of the reporting entity.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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