SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2015

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

a. Accounting Method

The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 year-end.

b. Basic Income (Loss) Per Share

For the Year Ended
December 31, 2015
Loss		Shares		Per Share
(Numerator)		(Denominator)		Amount
$	(1,487,781)		576,682	$	(2.58)

For the Year Ended
December 31, 2014
Loss		Shares		Per Share
(Numerator)		(Denominator)		Amount
$	(1,777,292)		576,682	$	(3.08)

The computations of basic loss per share of common stock are based on the weighted average number of shares outstanding at the date of the financial statements.

c. Foreign Currency Translation

The Company holds a certain note payable denominated in a foreign currency. Generally accepted accounting principles require the note balance be converted into and presented in U.S. dollar reporting currency in the Company’s financial statements. Due to fluctuations in foreign currency exchange rates, this conversion process results in gains and/or losses, which are recognized as income/expense at each reporting period. The Company accounts for these foreign exchange gains/losses in accordance with ASC topic 830, “Foreign Currency Transactions.” During the years ended December 31, 2015 and 2014 the Company recognized gains on foreign exchange translation differences totaling $871,320 and $-0-, respectively.

d. Provision for Taxes

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 that 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 December 31,:

	2015		2014

Deferred tax assets
NOL carryover	$	1,145,481	$	922,314
Related-party interest		(85,493)		(12,298)

Loss on settlement of debt		(281,217)		(145,800)
Valuation allowance		(778,770)		(764,216)

Net deferred tax asset	$	-	$	-

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate of 15% to pretax income from continuing operations for the years ended December 31, 2015 and 2014 due to the following:

	2015		2014

Book loss	$	(223,167)	$	(266,594)
Related-party interest		73,195		12,298

Loss on settlement of debt		135,417		145,800
Change in valuation allowance		14,555		108,496

	$	-	$	-

At December 31, 2015, the Company had net operating loss carry forwards of approximately $5,140,000 that may be offset against future taxable income through the year 2035. No tax benefit has been reported in the December 31, 2015 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. All tax years starting with 2010 are open for examination.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in the future.

e. Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

f. Fair Value of Financial Instruments

As at December 31, 2015, the fair value of cash and accounts and advances payable, including amounts due to and from related parties, approximate carrying values because of the short-term maturity of these instruments.

g. Recently Issued Accounting Pronouncements

The FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants.

Recent Accounting Standards Updates (“ASU”) through ASU No. 2014-07 contain technical corrections to existing guidance or affect guidance to specialized industries. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

h. Equity-Based Compensation

The Company accounts for its stock-based compensation in accordance with ASC Topic “Share-Based Payment.” The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. The Company did not grant any new employee options and no options were cancelled or exercised during the period ended December 31, 2015.

i. Revenue Recognition

The Company has no source of revenues. Revenue recognition policies will be determined when principal operations begin.

j. Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

k. Reclassification

Certain amounts in prior-period financial statements have been reclassified for comparative purposes to conform to presentation in the current-period financial statements.

CENTENARY INTERNATIONAL CORP 10-K