| Organization and Summary of Significant Accounting Policies | NOTE 1 - ORGANIZATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES This summary of
accounting policies for Mercari Communications Group, Ltd. (the Company) is presented to assist in understanding
the Companys financial statements. The accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements. Nature of Operations and Going Concern The accompanying
financial statements have been prepared on the basis of accounting principles applicable to a going concern, which
assume that the Company will continue in operation for at least one year and will be able to realize its assets and discharge its
liabilities in the normal course of operations. Several conditions
and events cast doubt about the Companys ability to continue as a going concern. The Company has incurred
net losses of approximately $285,771 from inception to May 31, 2016, has no revenues and requires additional financing in order
to finance its business activities on an ongoing basis. The Companys future capital requirements will depend on numerous
factors including, but not limited to, continued progress in finding a merger candidate and the pursuit of business opportunities.
The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments
have been obtained. In the interim, shareholders of the Company have been contributing capital to the Company to meet its ordinary
and normal operating expenses. Management believes that actions presently being taken to revise the Companys operating and
financial requirements provide them with the opportunity to continue as a going concern. These financial
statements do not reflect adjustments that would be necessary if the Company were unable to continue as a going concern.
While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise
doubt about the validity of the going concern assumption used in preparing these financial statements, there can
be no assurance that these actions will be successful. If the Company were unable to continue as a going concern,
then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the
reported revenues and expenses, and the balance sheet classifications used. Organization and Basis of Presentation The Company was
incorporated under the laws of the State of Colorado on December 30, 1987. From 1988 until early in 1990, the Company was engaged
in the business of providing educational products, counseling, seminar programs, and publications such as newsletters to adults
aged 30 to 50. The Company financed its business with private offerings of securities, obtaining shareholder loans, and with an
underwritten initial public offering of securities registered with the Securities and Exchange Commission (SEC).
The Companys business failed in early 1990. The Company ceased all operating activities during the period from June 1, 1990
to November 30, 2001 and was considered dormant. During this period that the Company was dormant, it did not file required reports
with the SEC under the Securities Exchange Act of 1934, as amended (Exchange Act). From November 30, 2001 to March
1, 2004, the Company was in the development stage. On August 3, 2004, the stockholders of the Company approved a plan of quasi-reorganization
which called for a restatement of accounts to eliminate the accumulated deficit and related capital accounts on the Companys
balance sheet. The quasi-reorganization was effective March 1, 2004. Since March 1, 2004, the Company has been in the development
stage and has not commenced planned principal operations. Nature of Business The Company has
no products or services as of May 31, 2016. The Company was organized as a vehicle to seek merger or acquisition candidates. The
Company intends to acquire interests in various business opportunities, which in the opinion of management will provide a profit
to the Company. Cash and Cash Equivalents For purposes of
the statement of cash flows, the Company considers all highly liquid debt 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. Pervasiveness of Estimates The preparation
of financial statements, in conformity with generally accepted accounting principles, required 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. Income Taxes The Company accounts
for income taxes under the provisions of ASC 740-10 & 740-30 (formerly SFAS No.109, Accounting for Income Taxes).
ASC 740 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based
on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities. Loss per Share Basic loss per share
has been computed by dividing the loss for the year applicable to the common shareholders by the weighted average number of common
shares during the years. There are no outstanding common stock equivalents for May 31, 2016 and 2015 and are thus not considered. Concentration of Credit Risk The Company has
no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign
hedging arrangements. Fair Value of Financial Instruments The carrying value
of cash and accrued expenses, if applicable, approximate their fair values based on the short-term maturity of these instruments.
The carrying amounts of debt were also estimated to approximate fair value. The Company utilizes
the methods of fair value measurement as described in ASC 820 to value its financial assets and liabilities. As defined in ASC
820, fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements,
ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into
three broad levels, which are described below: Level 1: Quoted prices (unadjusted)
in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest
priority to Level 1 inputs. Level 2: Observable prices that are
based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used
when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. New Accounting Pronouncements In August 2014,
the FASB issued Accounting Standards Update ASU 2014-15 on Presentation of Financial Statements Going Concern
(Subtopic 205-40) Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (the
Update). Currently, there is no guidance in U.S. GAAP about managements responsibility to evaluate whether
there is substantial doubt about an entitys ability to continue as a going concern or to provide related footnote disclosures.
The amendments in the Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing
and content of footnote disclosures. The amendments require management to assess an entitys ability to continue as a going
concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the
amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim
periods, (3) provide principles for considering the mitigating effect of managements plans, (4) require certain disclosures
when substantial doubt is alleviated as a result of consideration of managements plans, (5) require an express statement
and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the
date that the financial statements are issued (or available to be issued). The amendments in
the Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is
permitted. The Company has
reviewed all other recently issued but not yet effective accounting pronouncements and have determined that these new accounting
pronouncements are either not applicable or would not have a material impact on the results of operations or changes in the financial
position. |
