SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
Nov. 30, 2013
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business - Earn-A-Car, Inc. (formerly Victoria Internet Services, Inc.) was incorporated in the State of Nevada on October 9, 2009. The company was organized to operate as an online tax preparation service in the North American market. On December 7, 2011, prior to commencing those operations, the company has opted to change its business focus to the daily rental of vehicles in the South African market. On December 7, 2011, a simultaneous execution and closing was held under an Agreement and Plan of Reorganization (the Plan"), by and among Victoria Internet Services, Inc. (the "Company" "us" "we" ), Leon Golden (our then principal shareholder) ("Golden") and Earn-A-Car (PTY), LTD., a corporation organized under the laws of the Republic of South Africa ("EAC") and Depassez Investments Ltd, a Seychelles corporation ("DPL"), owned by Graeme Hardie (our new principal shareholder) ("Hardie"). Under the Plan DPL acquired 78,500,000 shares of our common stock from Golden for $150,000 and the balance of Golden's 205,000,000 shares were submitted to the transfer agent for cancellation and DPI contributed all of the shares of EAC to the Company so that EAC became a wholly owned subsidiary of the Company and the business of the Company is now the business of EAC. Mr. Golden also resigned as an officer and director of the Company and John Storey ("Storey") and Hardie were elected as directors and Storey was appointed CEO and President with Hardie being appointed Chairman of the board. On February 10, 2012 the Company filed an amendment with the Secretary of State for Nevada to gain permission to change its name from Victoria Internet Services, Inc. to Earn-A-Car, Inc. In conjunction with the name change the Company also filed to have a new symbol on the Over The Counter Bulletin Board (OTCBB). As of March 8, 2012 the Company no longer is listed with the symbol VRIS, and is now listed on the OTCBB as EACR. Earn-A-Car (Pty) Ltd - The wholly owned subsidiary was incorporated in South Africa on July 2, 2005, and is primarily engaged in the business of the daily rental of vehicles to business and leisure customers through company-owned stores in the country of South Africa. On July 18, 2011, its name was changed from "EasyCars Rental and Sales (PTY) Ltd." to "Earn-A-Car (PTY) Ltd.". Earn-A-Car Assets 1 Pty. Ltd. - the wholly owned subsidiary Earn-A-Car (Pty) Ltd. purchased a wholly owned subsidiary in June 2012, the name of this purchased entity is Earn-A-Car Assets 1 Pty. Ltd. The function of this entity is to hold title to vehicles that are purchased through financing which requires specific assets to be held as collateral for those loans. All of the assets and liabilities of this entity are consolidated and included in the presented financial statements according to generally accepted accounting principles of the United States. Basis of Presentation- The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and are presented in U.S. Dollars. In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. The Company has selected a February 28 year end. Estimates - The preparation of the Company's consolidated 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 and disclosures in the consolidated financial statements. Actual results could differ materially from those estimates. Cash and Cash Equivalents - Cash and cash equivalents include cash on hand and on deposit, including highly liquid investments with initial maturities of three months or less. At November 30, 2013 and February 28, 2013 the Company had $134,360 and $682,096 cash and cash equivalents, respectively. Allowance for Doubtful Accounts - An allowance for doubtful accounts is generally established during the period in which receivables are recorded. The allowance is maintained at a level deemed appropriate based on loss experience and other factors affecting collectability. As of November 30, 2013 and February 28, 2013 the Company had $44,004 and $7,444 in impaired receivables, respectively. The allowance for these impaired receivables was $12,235 and $14,359 for periods ending November 30, 2013 and February 28, 2013 respectively. Financing Issue Costs - Financing issue costs related to vehicle debt are deferred and amortized to interest expense over the term of the related debt using the effective interest method. Receivables and Payables- Trade receivables and payables are measured at initial recognition at fair value, and are subsequently measured using the effective interest rate method of valuation. Appropriate allowances for estimated uncollectible receivable balances are recognized in profit or loss when there is evidence of impairment. Payables includes all accrued cash back liability to clients as adjusted as required for the Company to meet its cash back obligation to its clients. The amount is determined at contract inception and is the approximate amount required to generate a lump sum at end of cash back period sufficient to match the future carrying value of the car at the end of this period. Cash back is accrued for monthly and the accrual is adjusted for regularly as required to ensure no shortfall occurs at the end of the period. Revenue-Earning Vehicles and Related Vehicle Depreciation Expense - Revenue-earning vehicles are stated at cost, net of related discounts. The Company must estimate what the residual values of these vehicles will be at the expected time of disposal to determine monthly depreciation rates. The estimation of residual values requires the Company to make assumptions regarding the age and mileage of the car at the time of disposal, as well as the general used vehicle auction market. The Company evaluates estimated residual values periodically, and adjusts depreciation rates accordingly, on a prospective basis. Differences between actual residual values and those estimated by the Company result in a gain or loss on disposal and are recorded as an adjustment to depreciation expense. Actual timing of disposal either shorter or longer than the life used for depreciation purposes could result in a loss or gain on sale. Generally, the average holding term for vehicles is approximately 7 years. Property and Equipment - Property and equipment are recorded at cost and are depreciated using principally the straight-line method over the estimated useful lives of the related assets. Estimated useful lives generally range from ten to thirty years for buildings and improvements and two to seven years for furniture and equipment. Leasehold improvements are amortized over the estimated useful lives of the related assets or leases, whichever is shorter. The average useful lives of fixed assets are as follows: Motor vehicles 6 years Computer equipment 3 years Computer software 2 years Leased assets - motor vehicles 6 years Long-Lived Assets - The Company reviews the value of long-lived assets, including software, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable based upon estimated future cash flows and records an impairment charge, equaling the excess of the carrying value over the estimated fair value, if the carrying value exceeds estimated future cash flows. Foreign Currency Translation - The Company's functional currency is the South African Rand, however the translation into US dollars is the presentation bases of these financial statements. Foreign assets and liabilities are translated into US$ using the exchange rate in effect at the balance sheet date, and results of operations are translated using an average rate for the period. Translation adjustments are accumulated and reported as a component of accumulated other comprehensive income or loss. Revenue Recognition - Revenues from vehicle rentals are recognized as earned on a daily basis under the related rental contracts with customers. The upfront administration fee is non-refundable. However the company defers its upfront administration fee income received at the inception of the rental contract over the average rental period. Simultaneously the company defers direct, incremental selling costs related to the rental of the vehicle over the same average rental period. This is a change in accounting policy and the new basis has been used to calculate revenue in 2013. The 2012 numbers have been restated to reflect the new policy. See Note 11. Advertising Costs - Advertising costs are primarily expensed as incurred. During the nine months ended November 30, 2013 and November 30, 2012, the Company incurred advertising expense of $10,486 and $66,802, respectively. Income Taxes - The Company has provided for income taxes on its separate taxable income or loss and other tax attributes. Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The Company has no tax liability in the United States. Earnings Per Share - Basic earnings per share ("EPS") is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is based on the combined weighted average number of common shares and common share equivalents outstanding which include, where appropriate, the assumed exercise of options. There were no such common stock equivalents outstanding at November 30, 2013. Other Comprehensive Income (Loss) - Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting stockholder's equity that, under GAAP, are excluded from net income (loss), including foreign currency translation adjustments, gains and losses related to certain derivative contracts, and gains or losses, prior service costs or credits, and transition assets or obligations associated with pension or other postretirement benefits that have not been recognized as components of net periodic benefit cost. Stock-Based Compensation - Stock-based compensation is accounted for at fair value in accordance with SFAS No. 123 and 123R (ASC 718). To date, the Company has not adopted a stock option plan and has not granted any stock options. New Accounting Standards - The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position or cash flow.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Nov. 30, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business - Earn-A-Car, Inc. (formerly Victoria Internet Services,

Inc.) was incorporated in the State of Nevada on October 9, 2009. The company

was organized to operate as an online tax preparation service in the North

American market. On December 7, 2011, prior to commencing those operations, the

company has opted to change its business focus to the daily rental of vehicles

in the South African market.

On December 7, 2011, a simultaneous execution and closing was held under an

Agreement and Plan of Reorganization (the Plan"), by and among Victoria Internet

Services, Inc. (the "Company" "us" "we" ), Leon Golden (our then principal

shareholder) ("Golden") and Earn-A-Car (PTY), LTD., a corporation organized

under the laws of the Republic of South Africa ("EAC") and Depassez Investments

Ltd, a Seychelles corporation ("DPL"), owned by Graeme Hardie (our new principal

shareholder) ("Hardie").

Under the Plan DPL acquired 78,500,000 shares of our common stock from Golden

for $150,000 and the balance of Golden's 205,000,000 shares were submitted to

the transfer agent for cancellation and DPI contributed all of the shares of EAC

to the Company so that EAC became a wholly owned subsidiary of the Company and

the business of the Company is now the business of EAC. Mr. Golden also resigned

as an officer and director of the Company and John Storey ("Storey") and Hardie

were elected as directors and Storey was appointed CEO and President with Hardie

being appointed Chairman of the board.

On February 10, 2012 the Company filed an amendment with the Secretary of State

for Nevada to gain permission to change its name from Victoria Internet

Services, Inc. to Earn-A-Car, Inc. In conjunction with the name change the

Company also filed to have a new symbol on the Over The Counter Bulletin Board

(OTCBB). As of March 8, 2012 the Company no longer is listed with the symbol

VRIS, and is now listed on the OTCBB as EACR.

Earn-A-Car (Pty) Ltd - The wholly owned subsidiary was incorporated in South

Africa on July 2, 2005, and is primarily engaged in the business of the daily

rental of vehicles to business and leisure customers through company-owned

stores in the country of South Africa. On July 18, 2011, its name was changed

from "EasyCars Rental and Sales (PTY) Ltd." to "Earn-A-Car (PTY) Ltd.".

Earn-A-Car Assets 1 Pty. Ltd. - the wholly owned subsidiary Earn-A-Car (Pty)

Ltd. purchased a wholly owned subsidiary in June 2012, the name of this

purchased entity is Earn-A-Car Assets 1 Pty. Ltd. The function of this entity is

to hold title to vehicles that are purchased through financing which requires

specific assets to be held as collateral for those loans. All of the assets and

liabilities of this entity are consolidated and included in the presented

financial statements according to generally accepted accounting principles of

the United States.

Basis of Presentation- The accompanying financial statements have been prepared

in accordance with accounting principles generally accepted in the United States

of America and are presented in U.S. Dollars. In the opinion of management, all

adjustments necessary in order for the financial statements to be not misleading

have been reflected herein. The Company has selected a February 28 year end.

Estimates - The preparation of the Company's consolidated 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 and disclosures in the consolidated financial statements.

Actual results could differ materially from those estimates.

Cash and Cash Equivalents - Cash and cash equivalents include cash on hand and

on deposit, including highly liquid investments with initial maturities of three

months or less. At November 30, 2013 and February 28, 2013 the Company had

$134,360 and $682,096 cash and cash equivalents, respectively.

Allowance for Doubtful Accounts - An allowance for doubtful accounts is

generally established during the period in which receivables are recorded. The

allowance is maintained at a level deemed appropriate based on loss experience

and other factors affecting collectability. As of November 30, 2013 and February

28, 2013 the Company had $44,004 and $7,444 in impaired receivables,

respectively. The allowance for these impaired receivables was $12,235 and

$14,359 for periods ending November 30, 2013 and February 28, 2013 respectively.

Financing Issue Costs - Financing issue costs related to vehicle debt are

deferred and amortized to interest expense over the term of the related debt

using the effective interest method.

Receivables and Payables- Trade receivables and payables are measured at initial

recognition at fair value, and are subsequently measured using the effective

interest rate method of valuation. Appropriate allowances for estimated

uncollectible receivable balances are recognized in profit or loss when there is

evidence of impairment. Payables includes all accrued cash back liability to

clients as adjusted as required for the Company to meet its cash back obligation

to its clients. The amount is determined at contract inception and is the

approximate amount required to generate a lump sum at end of cash back period

sufficient to match the future carrying value of the car at the end of this

period. Cash back is accrued for monthly and the accrual is adjusted for

regularly as required to ensure no shortfall occurs at the end of the period.

Revenue-Earning Vehicles and Related Vehicle Depreciation Expense -

Revenue-earning vehicles are stated at cost, net of related discounts.

The Company must estimate what the residual values of these vehicles will be at

the expected time of disposal to determine monthly depreciation rates. The

estimation of residual values requires the Company to make assumptions regarding

the age and mileage of the car at the time of disposal, as well as the general

used vehicle auction market. The Company evaluates estimated residual values

periodically, and adjusts depreciation rates accordingly, on a prospective

basis.

Differences between actual residual values and those estimated by the Company

result in a gain or loss on disposal and are recorded as an adjustment to

depreciation expense. Actual timing of disposal either shorter or longer than

the life used for depreciation purposes could result in a loss or gain on sale.

Generally, the average holding term for vehicles is approximately 7 years.

Property and Equipment - Property and equipment are recorded at cost and are

depreciated using principally the straight-line method over the estimated useful

lives of the related assets. Estimated useful lives generally range from ten to

thirty years for buildings and improvements and two to seven years for furniture

and equipment. Leasehold improvements are amortized over the estimated useful

lives of the related assets or leases, whichever is shorter. The average useful

lives of fixed assets are as follows:

         Motor vehicles                       6 years

         Computer equipment                   3 years

         Computer software                    2 years

         Leased assets - motor vehicles       6 years

Long-Lived Assets - The Company reviews the value of long-lived assets,

including software, for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable based upon

estimated future cash flows and records an impairment charge, equaling the

excess of the carrying value over the estimated fair value, if the carrying

value exceeds estimated future cash flows.

Foreign Currency Translation - The Company's functional currency is the South

African Rand, however the translation into US dollars is the presentation bases

of these financial statements. Foreign assets and liabilities are translated

into US$ using the exchange rate in effect at the balance sheet date, and

results of operations are translated using an average rate for the period.

Translation adjustments are accumulated and reported as a component of

accumulated other comprehensive income or loss.

Revenue Recognition - Revenues from vehicle rentals are recognized as earned on

a daily basis under the related rental contracts with customers. The upfront

administration fee is non-refundable. However the company defers its upfront

administration fee income received at the inception of the rental contract over

the average rental period. Simultaneously the company defers direct, incremental

selling costs related to the rental of the vehicle over the same average rental

period. This is a change in accounting policy and the new basis has been used to

calculate revenue in 2013. The 2012 numbers have been restated to reflect the

new policy. See Note 11.

Advertising Costs - Advertising costs are primarily expensed as incurred. During

the nine months ended November 30, 2013 and November 30, 2012, the Company

incurred advertising expense of $10,486 and $66,802, respectively.

Income Taxes - The Company has provided for income taxes on its separate taxable

income or loss and other tax attributes. Deferred income taxes are provided for

the temporary differences between the financial reporting basis and the tax

basis of the Company's assets and liabilities. The Company has no tax liability

in the United States.

Earnings Per Share - Basic earnings per share ("EPS") is computed by dividing

net income (loss) by the weighted average number of common shares outstanding

during the period. Diluted EPS is based on the combined weighted average number

of common shares and common share equivalents outstanding which include, where

appropriate, the assumed exercise of options. There were no such common stock

equivalents outstanding at November 30, 2013.

Other Comprehensive Income (Loss) - Comprehensive income (loss) consists of net

income (loss) and other gains and losses affecting stockholder's equity that,

under GAAP, are excluded from net income (loss), including foreign currency

translation adjustments, gains and losses related to certain derivative

contracts, and gains or losses, prior service costs or credits, and transition

assets or obligations associated with pension or other postretirement benefits

that have not been recognized as components of net periodic benefit cost.

Stock-Based Compensation - Stock-based compensation is accounted for at fair

value in accordance with SFAS No. 123 and 123R (ASC 718). To date, the Company

has not adopted a stock option plan and has not granted any stock options.

New Accounting Standards - The Company does not expect the adoption of recently

issued accounting pronouncements to have a significant impact on the Company's

results of operations, financial position or cash flow.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Earn-A-Car Inc. 10-Q/A