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Recent Accounting Pronouncements
6 Months Ended
Nov. 30, 2011
Recent Accounting Pronouncements  
Recent Accounting Pronouncements

Note B – Recent Accounting Pronouncements

 

In December 2011, the FASB issued Accounting Standards Update 2011-12, “Comprehensive Income: Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”.  This object of this Update is to defer only those changes in ASU No. 2011-05 that relate to the presentation of reclassifications adjustments.  This update is effective for annual reporting periods beginning on or after December 15, 2011 and interim periods within that fiscal year.  Management does not expect this update to have a material effect on the Company’s financial statements.

 

In December 2011, the FASB issued Accounting Standards Update 2011-11, “Balance Sheet: Disclosures about Offsetting Assets and Liabilities”.  The differences in the requirements for offsetting assets and liabilities in the presentation of financial statements prepared in accordance with U.S. GAAP and financial statements prepared in accordance with International Financial Reporting Standards (IFRS) makes the comparability of those statements difficult.  The objective of this Update is to facilitate comparison between those financial statements, specifically within the scope instruments and transaction eligible for offset in the form of derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements.  This update is effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within that fiscal year.  Management does not expect this update to have a material effect on the Company’s financial statements.

 

In June 2011, the FASB issued Accounting Standards Update 2011-05, “Comprehensive Income: Presentation of Comprehensive Income”.  This object of this Update is to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. This update is effective for annual reporting periods beginning on or after December 15, 2011 and interim periods within that fiscal year.  Management does not expect this update to have a material effect on the Company’s financial statements.

 

In May 2011, the FASB issued Accounting Standards Update 2011-04,”Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and AFRSs”.  The amendments in this Update will improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. generally accepted accounting principles and International Financial Reporting Standards.  This update is effective for annual reporting periods beginning on or after December 15, 2011 and interim periods within that fiscal year.  Management does not expect this update to have a material effect on the Company’s financial statements.

 

In October 2010, the FASB issued Accounting Standards Update 2010-26, “Financial Services – Insurance: Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.”  This FASB is intended to specify costs incurred in the acquisition of new and renewal contracts that should be capitalized as deferred acquisition costs and amortized over time using amortization methods dependent upon the nature of the underlying insurance contract.  This update is effective for annual reporting periods beginning on or after December 15, 2011 and interim periods within that fiscal year.  Management does not expect this update to have a material effect on the Company’s financial statements.

 

In August 2010, the FASB issued Accounting Standards Update 2010-21, “Accounting for Technical Amendments to Various SEC Rules and Schedules”.  This Accounting Standards Update amends various SEC paragraphs pursuant to the issuance of Release No. 33-9026;  Technical Amendments to Rules, Forms, Schedules and Codifications of Financial Reporting Policies.  This update has no material effect on the Company’s financial statements.

 

In July 2010, the FASB issued Accounting Standards Update 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.”  This FASB is intended to provide additional information to assist financial statement users in assessing an entity’s credit risk exposure and evaluating the adequacy of its allowance for credit losses.  This update affects all entities with financing receivables, excluding short-term trade accounts receivable or receivables measured at fair value or lower of cost or fair value. The effective date of this update is deferred by ASU-2011-01, “Deferral of the Effective Date of Disclosures about Troubled Debt Restructuring”.  It is now effective for interim and annual reporting periods beginning on or after June 15, 2011.  Management does not expect this update to have a material effect on the Company’s financial statements.

 

In February 2010, the FASB issued Accounting Standards Update 2010-09, “Subsequent Events:  Amendments to Certain Recognition and Disclosure Requirements.” This FASB retracts the requirement to disclose the date through which subsequent events have been evaluated and whether that date is the date the financial statements were issued or were available to be issued.  ASU 2010-09 is effective for interim and annual financial periods ending after February 24, 2010, and has been applied with no material impact on the Company’s financial statements.

 

In February 2010, the FASB issued Accounting Standards Update 2010-08, “Technical Corrections to Various Topics.” This FASB eliminates inconsistencies and outdated provisions in GAAP and provides needed clarification on others.  ASU 2010-08 is effective for interim and annual financial periods ending after February 2010, and has been applied with no material impact on the Company’s financial statements.

 

In January 2010, the FASB issued Accounting Standards Update 2010-06, “Fair Value Measurements and Disclosures:  Improving Disclosures About Fair Value Measurements.” This FASB requires additional disclosures about the fair value measurements including transfers in and out of Levels 1 and 2 and a higher level of disaggregation for the different types of financial instruments.  For the reconciliation of Level 3 fair value measurements, information about purchases, sales, issuances and settlements should be presented separately.  ASU 2010-06 is effective for interim and annual financial periods beginning after December 2009, and does not expected to have a material impact on the Company’s financial statements.

 

In August 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2009-04, “Accounting for Redeemable Equity Instruments – Amendment to Section 480-10-S99”.  This updates Section 480-10-S99, “Distinguishing Liabilities from Equity”, to reflect the SEC staff’s views regarding the application of Accounting Series Release No. 268, “Presentation in Financial Statements of “Redeemable Preferred Stocks.”  The exchange for Series B Preferred shares into Series C shares as elected by those shareholders utilizes the view of the SEC in classifying the Series C Preferred shares as equity.  There is no stated maturity on the Series C Preferred shares and at the time of redemption the Company will accrete changes in the redemption value at the appropriate time.  These amounts will be adjusted at the end of each reporting period as applicable.

 

In August 2009, the FASB issued Accounting Standards Update 2009-05, “Fair Value Measurements and Disclosures (Topic 820) – Measuring Liabilities at Fair Value”.  This update includes amendments to Subtopic 820-10 “Fair Value Measurements and Disclosures – Overall” for the fair value measurements of liabilities and provides clarification that in circumstances in which quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update.  This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after August 26, 2009.  The application of this update did not have a material impact on the Company’s results of operations or financial position.

 

In September 2009, the FASB issued Accounting Standards Update 2009-08, “Earnings Per Share-Amendments to Section 260-10-S99”.  This update includes technical corrections to Topic 260-10-S99, “Earnings Per Share”, based on EITF Topic D-53, “Computation of Earnings Per Share for a Period that Includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock” and EITF Topic D-42, “The Effect of the Calculation of Earnings Per Share for the Redemption or Induced Conversion of Preferred Stock”.  The application of this update did not have an impact on the Company’s results of operations, therefore not requiring additional earnings per share computation.