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EXCEL - IDEA: XBRL DOCUMENT - ECO SCIENCE SOLUTIONS, INC.Financial_Report.xls
10-K - PRISTINE SOLUTIONS INC. - ANNUAL REPORT FOR THE YEAR ENDED JANUARY 31, 2012 - ECO SCIENCE SOLUTIONS, INC.psi10kfor2012.htm
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EX-3 - AMENDED ARTICLES OF INCORPORATION - ECO SCIENCE SOLUTIONS, INC.exhibit34.htm
EX-31 - SOX SECTION 302(A) CERTIFICATION OF THE CEO & CFO - ECO SCIENCE SOLUTIONS, INC.exhibit311.htm
EX-32 - SOX SECTION 906 CERTIFICATION OF THE CEO & CFO - ECO SCIENCE SOLUTIONS, INC.exhibit321.htm
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2. Summary of Significant Accounting Policies
12 Months Ended
Jan. 31, 2012
Significant Accounting Policies [Text Block]
  2. Summary of Significant Accounting Policies

Basis of Presentation 


These consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States and are expressed in US dollars. The Company’s fiscal year end is January 31. 


Principal of Consolidation 


The consolidated financial statements include the accounts of Pristine Solutions Inc. and its 100% owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. 


Use of Estimates 


The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to long-lived assets and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.  


Cash and Cash Equivalents 


The Company considers all highly liquid instruments with maturity of three months or less at the time of purchase to be cash equivalents.  


Receivables 


The Company uses the allowance method to account for uncollectible accounts receivable. Accounts receivable are presented net of an allowance for doubtful accounts of $Nil at January 31, 2012, and 2011. 


Inventory 


Inventories, consisting of electric water heaters, are stated at the lower of cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Market is determined based on net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. As of January 31, 2011 and January 31, 2012, an allowance of $Nil and $Nil was recognized to mark the Company’s inventory to the lower of cost or market. 


Property and Equipment 


Property and equipment consists of a vehicle which is recorded at cost. The vehicle is being depreciated on a straight-line basis over 6 years. 


Financial Instruments 


The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable, loans payable and related party payables. The Company believes that the recorded values of the Company’s financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. 


The Company’s operations are in the United States and Jamaica, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. 


Revenue Recognition 


Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. No provision for discounts or rebates to customers, estimated returns and allowances or other adjustments were recognized during the years ended January 31, 2012 and 2011. In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of the Company’s final test procedures and the customer’s acceptance. No revenues were deferred due to products being configured to customer requirements during the years ended January 31, 2012 and 2011. 


Product Warranty 


The Company provides a one year warranty on all products sold. The Company’s policy is to accrue a warranty liability equal to 2% of sales based on the manufacturer’s past experience. Spare parts equal to 1% of each order are provided to the Company free of charge from the manufacturer. During the year ended January 31, 2012, the Company recognized $11 (2011 - $73) of warranty expenses in accrued liabilities and cost of goods sold. The Company did not have any warranty claims during the years ended January 31, 2012 and 2011. The Company will continue to evaluate its warranty policy based on actual products returned and costs incurred.  


The Company’s warranty accrual is based on the Company’s best estimates of product failure rates and unit costs to repair. However, the Company plans to release new products. As a result, it is at least reasonably possible that products could be released with certain unknown quality and/or design problems. Such an occurrence could result in materially higher than expected warranty and related costs, which could have a materially adverse effect on the Company’s results of operations and financial condition. 


Shipping and Handling Activities 


Shipping and handling costs of approximately $nil during the year ended January 31, 2012 (2011 - $1,600) are included in selling, general and administrative expenses. 


Earnings (Loss) Per Share 


Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At January 31, 2012, the Company had no potentially dilutive securities outstanding. 


Foreign Currency Translation 


Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Jamaican dollars. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. The United States dollar is the functional and reporting currency. 


Income Taxes 


The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. At January 31, 2012 the deferred tax asset related to the Company’s net operating loss carry forward has been fully reserved and no benefit has been recognized in the Company’s consolidated financial statements. 


Recent Accounting Pronouncements 


The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on their financial position or results of operations.