Note 12 - Income Taxes

9 Months Ended

Dec. 31, 2011

Note 12 – Income Taxes

The Company accounts for income taxes under FASB ASC 740-10, which provides for an asset and liability approach of accounting for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted tax laws, attributed to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts calculated for income tax purposes.

For the nine months ended December 31, 2011 and the year ended March 31, 2011, respectively, the Company produced net operating income (losses) before provision for income taxes of $(202,113), and $52,961 respectively, accordingly, a provision for income taxes of $-0- and $17,686 has been recorded at December 31, 2011 and March 31, 2011, respectively. The Company had approximately $197,000 and $-0- of federal and state net operating loss carry forwards at December 31, 2011 and March 31, 2011, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2030.

The federal and state income tax provision (benefit) is summarized as follows:

	December 31,			March 31,
	2011			2011
Current:
Federal income tax	$	-		$	10,081
State income tax		-			7,605
	$	-		$	17,686
Deferred tax assets, net operating loss carry forwards:
Federal income tax	$	51,000		$	-
State income tax		18,000			-
Less: valuation allowance		(51,314	)		-
Net deferred tax assets	$	17,686		$	-

Based on the available objective evidence, including the Company’s history of its losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a valuation allowance against a portion of its net deferred tax assets at December 31, 2011. The Company has recognized a deferred tax asset as of December 31, 2011 of $17,686 related to the portion of the net operating loss that can be carried back to recover the federal and state tax liabilities recognized from the fiscal year ended March 31, 2011. An allowance of $51,314 has been recognized to offset the remaining net operating loss carry forward that is more likely than not to not be fully realizable.

A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:

	December 31,			March 31,
	2011			2011

Federal and state statutory rate		35%			35%
Change in valuation allowance on deferred tax assets		(35%	)		(35%	)

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions as of any date on or before December 31, 2011.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 136, 172

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 43, 44, 45, 46, 47, 48, 49

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Paragraph h

-Article 4

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 9

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 15

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.4-08.(h))

-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

+ Details

FrogAds, Inc. 10-Q