Income Taxes

12 Months Ended

Jul. 31, 2014

NOTE 8 – INCOME TAXES

The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. Due to the Company’s accumulated net loss, there was no provision for income taxes for the years ended July 31, 2014 and 2013.The difference between the income tax expense of zero shown in the statement of operations and pre-tax book net loss times the federal statutory rate of 35% is principally due to the change in the valuation allowance.

At July 31, 2014 and 2013, deferred tax assets consisted of the following:

	2014			2013

Deferred tax assets (net operating loss carry-forwards)	$	1,387,109		$	609,050
Less: valuation allowance		(1,387,109	)		(609,050	)
Net deferred tax asset	$	—		$	—

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, management has applied a full valuation allowance against its net deferred tax assets at July 31, 2014 and 2013. The net change in the total valuation allowance from July 31, 2013 to July 31, 2014 was an increase of $778,059.

As of July 31, 2014, the Company has federal net operating loss carryforwards of approximately $3,943,000 for federal and state tax purposes, respectively. If not utilized, these losses will expire beginning in 2030 for both federal and state purposes.

- 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+ Details

Imerjn Inc. 10-K/A