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XML - IDEA: XBRL DOCUMENT - NORTHERN MINERALS & EXPLORATION LTD.R9.htm
10-Q - PUNCHLINE RESOURCES 10Q QUARTERLY REPORT FOR THREE MONTHS ENDED OCTOBER 31, 2012 - NORTHERN MINERALS & EXPLORATION LTD.punchline10q12013.htm
EX-32.1 - SECTION 906 CERTIFICATION - NORTHERN MINERALS & EXPLORATION LTD.punchq12013ex_321.htm
EX-31.1 - SECTION 302 CERTIFICATION - NORTHERN MINERALS & EXPLORATION LTD.punchq12013ex_311.htm
EXCEL - IDEA: XBRL DOCUMENT - NORTHERN MINERALS & EXPLORATION LTD.Financial_Report.xls
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v2.4.0.6
Accounting Policies
3 Months Ended
Oct. 31, 2012
Accounting Policies:  
Significant Accounting Policies

2.

SIGNIFICANT ACCOUNTING POLICIES

 

a)

Basis of Presentation

 

The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (US GAAP) applicable to development stage companies.

 

b)

Fiscal Periods

 

The Company’s fiscal year end is July 31.

 

c)

Use of Estimates

 

The preparation of unaudited interim financial statements in conformity with U.S. 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 financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

d)

Cash and Cash Equivalents

 

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. As at October 31, 2012, cash and cash equivalents of $60,691 (July 31, 2012 - $Nil) as funds held in trust.

 

e)

Financial Instruments and Risk Concentrations

 

The Company’s financial instruments comprise cash and cash equivalents, loan receivable, accounts payable and accrued liabilities, notes payable and convertible loan. Unless otherwise indicated, the fair value of financial assets and financial liabilities approximate their recorded values due to their short terms to maturity. The Company determines the fair value of its long-term financial instruments based on quoted market values or discounted cash flow analyses.

 

Financial instruments that may potentially subject the Company to concentrations of credit risk comprise primarily cash and cash equivalents and accounts receivable. Cash and cash equivalents comprise deposits with major commercial banks and/or checking account balances. With respect to accounts receivable, the Company performs periodic credit evaluations of the financial condition of its customers and typically does not require collateral from them. Allowances are maintained for potential credit losses consistent with the credit risk of specific customers and other information. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest or currency risks in respect of its financial instruments.

 

f)

Foreign Currency Translation

 

The financial statements are presented in US dollars. In accordance with Statement of Financial Accounting Standards The Company maintains its accounting records in U.S. dollars, which is the functional, and reporting currency. The resulting foreign exchange gains and losses are included in operations. Foreign exchange loss amounted to $2,063 for the three-month period ended October 31, 2012 (October 31, 2011 - $Nil).

 

g)

Income Taxes

 

The Company accounts for its income taxes in accordance with ASC 740, “Income Taxes”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that the deferred tax assets will not be realized.

 

h)

Basic and Diluted (Loss) per Share

 

The Company reports earnings (loss) per share in accordance with ASC 260, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company has no potential dilutive instruments and accordingly, basic loss and diluted share loss per share are equal.