ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Aug. 31, 2015

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Accounting Methods

The Company's financial statements are prepared using the accrual method of accounting. The Company has elected an August 31 year-end.

Basic and Diluted Loss Per Share

Basic and Diluted Loss Per Share

The Company presents both basic and diluted earnings per share (EPS) on the face of the income statement. 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 including convertible debt, stock options, and warrants, using the treasury stock method, and convertible securities, 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. The Company had net losses as of August 31, 2015 and 2014, so the diluted EPS excluded all dilutive potential shares in the diluted EPS because there effect is anti-dilutive.

Cash Equivalents

Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Use of Estimates

Use of Estimates

The preparation of financial statements 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 amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Revenue Recognition

The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Amounts invoiced or collected in advance of product delivery or providing services are recorded as deferred revenue. The Company accrues for warranty costs, sales returns, bad debts, and other allowances based on its historical experience. The Company has recognized minimal revenue since inception.

Income Taxes

Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction. The Company's policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components as of August 31, 2015 and 2014:

	2015			2014
Deferred tax assets:
Net operating loss carry forward	$	135,409		$	19,828
Related party accruals		2,470			711
Depreciation and amortization		58,123			3,343
Valuation allowance		(196,002	)		(23,882	)
Net deferred tax asset	$	-		$	-

The federal income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations for the years ended August 31, 2015 and 2014 due to the following:

	2015			2014
Pre-tax book income (loss)	$	(267,629	)	$	(18,624	)
Depreciation and amortization		58,123			3,343
Related party accruals		1,759			711
Other non-deductible expenses		99,221			-
Valuation allowance		111,526			14,570
Federal Income Tax	$	-		$	-

The Company had net operating losses of approximately $398,000 that expire in years through 2035. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

Stock-Based Compensation

Stock-Based Compensation

The Company records stock-based compensation using the fair value method. Equity instruments issued to employees and the cost of the services received as consideration are accounted for in accordance with ASC 718 Stock Compensation and are measured and recognized based on the fair value of the equity instruments issued. All transactions with non-employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for in accordance with ASC 515 Equity-Based Payments to Non-Employees, based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

New Accounting Pronouncements

New Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its 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 its financial position or results of operations.

Long Lived Assets

Periodically the Company assesses potential impairment of its long-lived assets, which include property, equipment and acquired intangible assets, in accordance with the provisions of ASC Topic 360, Property, Plant and Equipment (“ASC 360”). The Company recognizes impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying values. An impairment loss would be recognized in the amount by which the recorded value of the asset exceeds the fair value of the asset, measured by the quoted market price of an asset or an estimate based on the best information available in the circumstances. During the year ended august 31, 2015, the Company recognized impairment losses of $140,624 and $30,327 on the write-off of intangible assets and property and equipment, respectively.

Inventory

Inventory

Inventories are stated at the lower of costs (first in, first out) or market (net realizable value). Inventories consist of raw materials, product and packaging inventory.

Inventories consist of the following at August 31, 2015:


Raw materials	$	6,912
Product		70,592
Packaging		21,407
Total	$	98,911

THAT MARKETING SOLUTION, INC. 10-K