- We protect over 150,000 people across North America
- Over 20 years experience in the industry
- One of the few alarm companies to manufacture our own technology
- You deal directly with AlarmForce at all times
- Lowest prices and best value in the business
Financial Information
(h) Deferred Charges
Finance charges, certain direct response marketing costs, costs incurred in developing the centralized monitoring station and deferred stock compensation cost are capitalized as deferred charges. Amortization is recorded annually as follows:(i) Deferred finance charges are written off on a straight-line basis over the terms of the loans to which they relate;
(ii) Deferred direct response marketing costs are written off over the four year term of rental agreements to which they relate; and
(iii) Deferred development costs are written off on a straight-line basis over 10 years, which represents management’s best estimate of the useful life of the centralized monitoring station.
(iv) Deferred stock compensation cost is written off over the vesting period.
(i) Foreign Currencies
The company records foreign currency transactions at the Canadian dollar equivalent at the date of the transaction. Assets and liabilities at the year-end denominated in foreign currencies are translated at exchange rates in effect at the balance sheet date. Exchange gains and losses resulting from differences in exchange rates between the transaction date and the settlement date or at year-end are included in income for the year.
(j) Use of Estimates
The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the 17 date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
(i) Stock-based compensation
As of November 1, 2003, the Company adopted the new recommendations of the Canadian Institute of Chartered Accountants relating to stock-based compensation and has elected to adopt on a prospective basis the fair value method of accounting for all stock option awards. Under this method the Company recognizes a compensation expense based on the fair value of the options on the date of grant which is determined by using an option pricing model. The fair value of the options is recognized over the vesting period of the options granted as compensation expense and paid in capital options. The paid-in capital options balance is reduced as the options are exercised and the amount initially recorded for the options in paid-in capital is credited to capital stock. No compensation expense is recorded for stock options awarded and outstanding prior to November 1, 2003.
The compensation cost charged against income was $105,281 for the year ended October 31, 2004 and was credited to paid-in capital options.
3. CHANGE IN ACCOUNTING POLICY
a) Long-lived assets:
The company has adopted CICA Handbook Section 3063 “Impairment of Long-Lived Assets”. Long-lived assets, including Property Plant and Equipment, intangible assets and deferred charges with finite useful lives are to be amortized over their useful lives. The company reviews its long-lived assets for impairment on a regular basis or more frequently if events or changes in circumstances indicate that the carrying value exceeds its fair value, as determined by the undiscounted future cash flows expected from the related subscriber accounts. If the sum of the undiscounted future cash flow expected and eventual disposition of assets is less than the carrying amount, it is considered to be impaired. An impairment loss is measured as the amount by which the carrying amount of the group of assets exceeds its fair value. At October 31, 2004, the Company recorded an impairment loss of $25,600. No such impairment had occurred as at October 31, 2003.
See accompanying notes to financial statements.