| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting
Basis The
Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP”
accounting). The Company has adopted a September 30 fiscal year end. Basis
of Presentation The
accompanying unaudited interim financial statements of Alterola Biotech Inc. were prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission
(“SEC”), and should be read in conjunction with the financial statements and notes thereto contained in the Company’s
registration statement filed with the SEC on Form 10-K . In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for the financial statements to be not misleading have been reflected herein. The results of
operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial
statements which would substantially duplicate the disclosure contained in the financial statements for the most recent fiscal
year 2016 as reported in Form 10-K, have been omitted. Use
of Estimates The
preparation of financial statements in conformity with GAAP 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Cash
and Equivalents For
purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of
three months or less to be cash equivalents. NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Intellectual
Property The
Company does not amortize intangible assets with indefinite useful lives, rather such assets are required to be tested for impairment
at least annually or sooner whenever events or changes in circumstances indicate that the assets may be impaired. The Company
amortizes its intangible assets with definite lives over their estimated useful lives and reviews these assets for impairment.
The Company will amortize its acquired intangible assets with definite lives over the estimated economic life of the completed
product. Website
Development Costs Costs
incurred in developing and maintaining a website are expensed when incurred for the planning, content population, and administration
or maintenance of the website. All development costs for the application, infrastructure, and graphics development are capitalized
and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized costs are amortized using straight-line
basis over two years, the estimated economic life of the completed website. Amortization for the company’s website was $1,550
and $1,550 for the six months ended March 31, 2017 and 2016 respectively. Fair
Value of Financial Instruments Alterola’s
financial instruments consist of cash and equivalents, accrued expenses, accrued interest and notes payable. The carrying amount
of these financial instruments approximates fair value (“FV”) due either to length of maturity or interest rates that
approximate prevailing market rates unless otherwise disclosed in these financial statements. FV
is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction
between market participants at the measurement date and in the principal or most advantageous market for that asset or liability.
The FV should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on
assumptions specific to the entity. In addition, the FV of liabilities should include consideration of non-performance risk including
our own credit risk. In
addition to defining FV, the disclosure requirements around FV establish a FV hierarchy for valuation inputs which is expanded.
The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring FV are observable
in the market. Each FV measurement is reported in one of the three levels which is determined by the lowest level input that is
significant to the FV measurement in its entirety. These levels are: Level
1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level
2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices
for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant
assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the
assets or liabilities. NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fair
Value of Financial Instruments (continued) Level
3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants
would use in pricing the asset or liability. The FVs are therefore determined using model-based techniques that include option
pricing models, discounted cash flow models, and similar techniques. The
carrying value of the Company’s financial assets and liabilities which consist of cash, accounts payable and accrued liabilities,
and notes payable are valued using level 1 inputs. The Company believes that the recorded values approximate their FV due to the
short maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to
significant interest, exchange or credit risks arising from these financial instruments. Income
Taxes Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and
liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and
are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized. Revenue
Recognition The
Company will recognize revenue when products are fully delivered or services have been provided and collection is reasonably assured. Loss
Per Common Share Basic
loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted
loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as
the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting
period. The Company does not have any potentially dilutive instruments. Stock-Based
Compensation Stock-based
compensation is accounted for at FV in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan
and has not granted any stock options. Recent
Accounting Pronouncements In
February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The guidance in
ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to
recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative
and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption
permitted. The Company is currently evaluating the effect this standard will have on its financial statements. In
January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which
clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions
should be accounted for as acquisitions or disposals of assets or businesses. The standard is effective for fiscal years beginning
after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The standard should
be applied prospectively on or after the effective date. The Company will evaluate the impact of adopting this standard prospectively
upon any transactions of acquisitions or disposals of assets or businesses. In
January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill
impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which
a reporting unit’s carrying value exceeds its FV, not to exceed the carrying amount of goodwill. The guidance should be
adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early
adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company
is currently evaluating the impact of adopting this standard on its financial statements. In
June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment
Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services and
aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees.
ASU 2018-07 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The adoption of this accounting
pronouncement is not expected to have an impact on the Company's financial statements. Alterola
has reviewed recent accounting pronouncements issued to the date of the issuance of these financial statements, and we do not
believe any of these pronouncements will have a material impact on the Company. |
