Payables and Accruals

3 Months Ended

Dec. 31, 2011

Accounts Payable and Accrued Liabilities Disclosure

7. Financial instruments and risk management

a) Fair value

The Company’s financial instruments include cash and accounts payable and accrued liabilities. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.

b) Foreign exchange risk

The Company expects to raise equity predominantly in United States dollars. The Company is conducting business in Canada where financial transactions are based on the Canadian dollar. As such, the Company is subject to risks due to fluctuations in the exchange rates for the U.S. and Canadian dollar. The Company does not enter into derivative financial instruments to mitigate its exposure to foreign currency risk.

At December 31, 2011 the Company had the following financial assets and liabilities denominated in Canadian dollars:

	CDN Dollars
Cash	$	1,254
Accounts payable and accrued liabilities	$	173,152

At December 31, 2011 CDN dollar amounts were converted at a rate of $1.02 Canadian dollars to $1.00 US dollar.

Scout Exploration, Inc 10-Q