- 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
b) Revenue recognition:
In 2004, the Company decided to retroactively adopt the Canadian accounting standards including CICA Emerging Issues Committee Abstract 142 “Revenue Arrangements with Multiple Deliverables” issued in December 2003, regarding the timing of revenue recognition and the classification of certain items as revenue or expense.
The accounting standard requires alarm equipment installation revenue and related costs from both new and existing subscribers to be deferred and amortized over four years, the term of the customer agreement. Prior to adopting the new standard, revenues were recorded at the completion of the transaction.
The effect of these changes on the 2003 financial statement balances is as follows:
| Previously reported | Change | Restated | |
| $ | $ | $ | |
| Balance Sheet | |||
| Deferred Revenue | - | 978,307 | 978,307 |
| Future Income Tax | 1,570,000 | (323,000) | 1,247,000 |
| Income Statement | |||
| Revenue | 12,520,851 | (534,762) | 11,986,089 |
| Cost of Sales | 3,427,176 | (255,691) | 3,171,485 |
| Income taxes | 851,862 | (213,000) | 638,862 |
| Net Income | 1,367,580 | (66,071) | 1,301,509 |
4. DEFERRED CHARGES
| 2004 | 2003 | |
| $ | $ | |
| Deferred direct response marketing costs (net of accumulated amortization of $7,578,364; 2003 - $5,452,840)- | 5,778,219 | 4,235,556 |
| Deferred stock compensation | 96,859 | - |
| Deferred development costs (net of accumulated amortization of $55,953; 2003- $ 46,362) | 39,962 | 49,553 |
| Deferred charges relating to long-term debt (net of accumulated amortization of $6,500; 2003 - $5,687) | - | |
| 5, 915,040 | 4,285,922 |
5. PROPERTIES, PLANT AND EQUIPMENT
| 2004 | 2003 | |||
| Cost | Accumulated Amortization |
Cost | Accumulated Amortization |
|
| $ | $ | $ | $ | |
| Computer equipment | 525,227 | 369,129 | 451,566 | 320,362 |
| Computer software | 226,583 | 97,756 | 112,106 | 69,855 |
| Furniture and fixtures | 264,210 | 146,404 | 222,657 | 122,147 |
| Leasehold improvements | 255,330 | 187,482 | 244,636 | 165,335 |
| Moulding equipment | 57,386 | 27,695 | 57,386 | 16,219 |
| Revenue equipment | 16,038,753 | 6,716,914 | 14,033,067 | 5,538,308 |
| 17,367,489 | 7,545,380 | 15,121,418 | 6,232,226 | |
| Net Book Value | 9,822,109 | 8,889,192 |
6. INTANGIBLE ASSETS
| Intangible assets consist of the following: | 2004 | 2003 |
| $ | $ | |
| Franchise rights | 3,994,909 | 2,415,425 |
| Other | - | 36,000 |
| 3,994,909 | 2,451,425 | |
| Less accumulated amortization | 819,106 | 509,951 |
| 3,175,803 | 1,941,474 |