NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the
preparation of the accompanying financial statements follows.
BUSINESS AND BASIS OF PRESENTATION
Autovative Products Inc. ("Company"
or "Autovative Products") was formed on March 8, 2004 under the laws of the State of Nevada.
Autovative Products is a Specialty distribution
company of fleet truck products. Currently the Company has exclusive distribution rights with both Federal Express (FedEx) and
United Postal Service (UPS) for its Portable Tow Truck. The Company is currently in the process of marketing its Overhead
Door Saver to both FedEx and UPS.
As shown in the accompanying financial statements,
the Company had a net loss of $37,344 for the quarter at March 31, 2012 and incurred a net loss of $20,483 for the quarter at March
31, 2011. At March 31, 2012 the Company's current assets were $8,382 and the total assets were $8,382 and its liabilities were
The preparation of the financial statement
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
It is management's opinion that all adjustments
necessary for a fair statement of the results of the interim periods have been made, and all adjustments are of a normal recurring
nature, with the exception of the item noted in Note 2 to the Financial Statements.
The Company recognizes revenue when earned
in accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements".
The SEC staff released Staff Accounting Bulletin
(SAB) No. 101, Revenue Recognition. to make its interpretive guidance consistent with current accounting guidance, Also, SAB 101
incorporates portions of the Revenue Recognition in Financial Statements - Frequently Asked Questions and Answers document that
the SEC staff considered relevant and rescinds the remainder. The company's revenue recognition policies are consistent with this
We account for income taxes in accordance with
FASB ASC 740, Income Taxes which requires the recognition of deferred tax liabilities and assets for the expected future
tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities
and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted
tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income
reported for financial reporting purposes and income tax purposes are insignificant.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are computed using straight-line methods over the estimated
useful lives of the assets, principally three to five years, or the term of the lease, if shorter, for leasehold improvements.
IMPAIRMENT OF LONG-LIVED ASSETS
2011, the FASB issued ASU 2011-08 Goodwill and Other (Topic 350) which amends the guidance on testing goodwill for impairment.
Under the revised guidance, entities testing goodwill for impairment have the option of performing a qualitative assessment before
calculating the fair value of the reporting unit (i.e., step 1 of the goodwill impairment test). If entities determine, on the
basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount,
the two-step impairment test would be required. The ASU does not change how goodwill is calculated or assigned to reporting units,
nor does it revise the requirement to test goodwill annually for impairment. In addition, the ASU does not amend the requirement
to test goodwill for impairment between annual tests if events or circumstances warrant; however, it does revise the examples of
events and circumstances that an entity should consider. The guidance is effective for annual and interim goodwill impairment tests
performed for fiscal years beginning after March 15, 2011. The Statement requires that long-lived assets and certain identifiable
intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes
in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.
The Company uses an estimate of undiscounted future net cash flows of the assets over the remaining useful lives in determining
whether the carrying value of the assets is recoverable. If the carrying values of the assets exceed the expected future cash flows
of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and
their estimated fair values. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable
cash flows that are independent from other groups of assets. The evaluation of long-lived assets requires the Company to use estimates
of future cash flows. However, actual cash flows may differ from the estimated future cash flows used in these impairment tests.
The company performed such an impairment review
and determined that the future benefits from long-lived assets no longer exceed their carrying and a write down of the carrying
value was necessary-(see NOTE 2).
Although the Company fully amortized its long
lived asset in 2011 consisting of intellectual property which consists of its mold design for the auto traction mat; the Company
plans to engage in production of the auto mold and produce traction mats for autos in 2012/2013 through the use of its intellectual
In June 2011, the FASB issued ASU 2011-5 Comprehensive
Income (Topic 220) — Presentation of Comprehensive Income. The new guidance revises the manner in which entities present
comprehensive income in their financial statements. ASU 2011-5 requires entities to report components of comprehensive income in
either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The ASU does not change
the items that must be reported in other comprehensive income. This guidance will require a change in the presentation of the financial
statements and will require retrospective application. In March 2011, the FASB deferred certain provisions of the ASU that relate
to presentation of reclassification adjustments. The guidance will not impact the Company's financial condition, results of operations
or cash flow.
Financial Accounting Standards Board (FASB) released the 200 section of the Accounting Standards Codification for the purpose of
discussing the broad topic of Presentation. Accounting Standards Codification 280 (ASC 280) was released to address the more specific
topic of how businesses with multiple segments should report these. Operating segments are identified as components of an
enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker,
or decision making group, in making decisions how to allocate resources and assess performance. The information disclosed herein,
materially represents all of the financial information related to the Company's principal operating segment.
EARNINGS PER SHARE
share is calculated in accordance with the ASC Topic 260, Earnings Per Share specifying
the computation, presentation and disclosure requirements of earnings per share information. Basic earnings per share have been
calculated based upon the weighted average number of common shares outstanding. Stock options and warrants have been excluded as
common stock equivalents in the diluted earnings per share because they are either anti-dilutive, or their effect is not material.
CONCENTRATIONS OF CREDIT RISK
Financial instruments and related items, which
potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade receivables.
The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may
be in excess of the FDIC insurance limit.
The Company follows a policy of charging the
costs of advertising to expenses incurred. The Company incurred advertising expenses totaling $9,000 for the quarter at March 31,
2012 and $3,000 for the quarter at March 31, 2011.
NEW ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued ASU 2011-04 Fair
Value Measurement (Topic 820). The ASU is the result of joint efforts by the FASB and International Accounting Standards Board
(IASB) to develop a single, converged fair value framework. While the ASU is largely consistent with existing fair value measurement
principles in U.S. GAAP, it expands existing disclosure requirements for fair value measurements and makes other amendments to
eliminate unnecessary wording differences between U.S. GAAP and IFRSs. The amendments are effective for annual and interim goodwill
impairment tests performed for fiscal years beginning after March 15, 2011. The impact of this standard has been taken into account
as noted in NOTES 2, 3 and 4 of the Company's financial statements.
The Company has had losses since its inception.
There is no assurance that we will become profitable in the future.
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern that contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. However, the ability of the Company to continue as a going concern on a longer-term
basis will be dependent upon the ability to generate sufficient cash flow from operations to meet its obligations on a timely basis,
the ability to successfully raise additional financing, and the ability to ultimately attain profitability.