Summary of Significant Accounting Policies: Debt Discount Policy (Policies)
|6 Months Ended|
Jun. 30, 2017
|Debt Discount Policy||
The Company determines if the convertible debenture should be accounted for as liability or equity under ASC 480, Liabilities - Distinguishing Liabilities from Equity (ASC 480). ASC 480, applies to certain contracts involving a companys own equity, and requires that issuers classify the following freestanding financial instruments as liabilities. Mandatorily redeemable financial instruments, obligations that require or may require repurchase of the issuers equity shares by transferring assets (e.g., written put options and forward purchase contracts), and certain obligations where at inception the monetary value of the obligation is based solely or predominantly on:
· A fixed monetary amount known at inception, for example, a payable settleable with a variable number of the issuers equity shares with an issuance date fair value equal to a fixed dollar amount,
· Variations in something other than the fair value of the issuers equity shares, for example, a financial instrument indexed to the S&P 500 and settleable with a variable number of the issuers equity shares, or
· Variations inversely related to changes in the fair value of the issuers equity shares, for example, a written put that could be net share settled.
If the entity determined the instrument meets the guidance under ASC 480 the instrument is accounted for as a liability with a respective debt discount. The Company records debt discounts in connection with raising funds through the issuance of promissory notes (see Notes 8 and 9). These costs are amortized to non-cash interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.
Disclosure of accounting policy related to debt. Includes, but is not limited to, debt issuance costs, the effects of refinancings, method of amortizing debt issuance costs and original issue discount, and classifications of debt.
Reference 1: http://www.xbrl.org/2003/role/presentationRef