| Organization and Summary of Significant Accounting Policies | NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Organization Mercari Communications
Group, Ltd. (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,
shareholder loans, and with an underwritten initial public offering of securities registered with the Securities and Exchange Commission
(“SEC”). The Company’s business failed in early 1990. The Company ceased all operations from 1990 to 2001 and
was dormant. During this period 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 2001 to 2004, the Company was in the development stage. On August 3,
2004, the shareholders 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 Company’s balance sheet. The quasi-reorganization was effective
March 1, 2004. Since March 1, 2004, the Company is in the development stage, and has not commenced planned principal operations.
The Company has no products or services as of May 31, 2017. Going Concern The accompanying
financial statements were 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 Company’s ability to continue as a “going concern.” The Company has incurred
net losses of $364,081 from inception to May 31, 2017, has no revenues and requires additional financing in order to finance its
business activities on an ongoing basis. The Company’s 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. 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 Company’s 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. Basis of Presentation The financial statements were prepared
in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant
to the rules and regulations of the SEC for annual financial statements. 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. Use of Estimates The preparation
of financial statements in conformity with US GAAP 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. Development
Stage Company The
Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification (“ASC”).
Although the Company has recognized nominal amounts of revenue, it is still devoting substantially all of its efforts on establishing
the business. All losses accumulated since its inception on March 1, 2004 were considered part of the Company’s development
stage activities. In
June 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-10, Development Stage Entities (Topic 915):
Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic
810, Consolidation. The
amendments in this ASU remove the definition of a development stage entity from the Master Glossary of the Accounting Standards
Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities
from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date
information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development
stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in
the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. For
public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim
periods therein. The Company adopted ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial
Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references
to the development stage. Income Taxes The
Company accounts for income taxes under Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under
this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of
assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred
tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will
not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. The
estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying
balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred
tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. Management
makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates
of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions.
In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax
jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Uncertain Tax Positions The
Company follows paragraph 740-10-25 of the FASB ASC. Paragraph 740-10-25-13 addresses the determination of whether tax benefits
claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13,
the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized
in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood
of being realized upon ultimate settlement. The portion of the benefits associated with tax positions taken that exceeds the amount
measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along
with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated
with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative
expenses in the statements of income. The
Company did not take any uncertain tax positions and had no unrecognized tax liabilities or benefits in accordance with the provisions
of Section 740-10-25 at May 31, 2017 and 2016. The tax years 2014-2016 remain open to examination for federal income tax purposes
and by the other major taxing jurisdictions to which the Company is subject. Loss per Share Basic loss per share
has been computed by dividing the loss for the period 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, 2017 and 2016 and they 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 (“FV”) measurement as described in ASC 820 to value its financial assets and liabilities.
As defined in ASC 820, FV 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 FV measurements,
ASC 820 establishes a FV hierarchy that prioritizes observable and unobservable inputs used to measure FV 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 FV 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 FV hierarchy gives the lowest priority to Level 3 inputs. Related
Parties The
Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the related parties include: a. affiliates of the Company; b. entities for which investments in their
equity securities would be required, absent the election of the FV option under the FV Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company;
f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate
interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties
or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that
one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The
financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense
allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated
in the preparation of financial statements is not required in those statements. The
disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions
to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such
other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar
amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the
method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the
date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Commitments
and Contingencies The
Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the
date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or
more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves
an exercise of judgment. In
assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result
in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived
merits of the amount of relief sought or expected to be sought therein. If
the assessment of a contingency indicates it is probable a material loss was incurred and the amount of the liability can be estimated,
then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential
material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of
the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would
be disclosed. Management does not believe, based upon information available at this time that these matters will have a material
adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that
such matters will not materially and adversely affect the Company’s business, financial position, and results of operations
or cash flows. New Accounting Pronouncements In
August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 clarifies
the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. This ASU is effective
for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early
adoption is permitted. The Company is currently assessing the potential impact of ASU 2016-15 on its financial statements. In
October 2016, the FASB issued ASU No. 2016-17 Consolidation (Topic 810): Interests Held through Related Parties That Are under
Common Control. This ASUamends the consolidation guidance on how a reporting entity that is the single decision maker of a variable
interest entity (VIE) should treat indirect interests in the entity held through related parties that are under common control
with the reporting entity when determining whether it is the primary beneficiary of that VIE. This ASU is effective for public
business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early
adoption is permitted. The Company does not anticipate that the adoption of this ASU will have a significant impact on its financial
statements. In
November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that
a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described
as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash
equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total
amounts shown on the statement of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and
interim period within those fiscal years. Early adoption is permitted, including adoption in an interim period. The standard should
be applied using a retrospective transition method to each period presented. The Company does not anticipate that the adoption
of this ASU will have a significant impact on its financial statements. 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. |
