| Description of Business and Summary of Significant Accounting Policies | NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Nature of Operations Avalon Oil & Gas, Inc. (the "Company")
was originally incorporated in Colorado in April 1991 under the name Snow Runner (USA), Inc. The Company was the general partner
of Snow Runner (USA) Ltd.; a Colorado limited partnership to sell proprietary snow skates under the name "Sled Dogs"
which was dissolved in August 1992. In late 1993, the Company relocated its operations to Minnesota and in January 1994 changed
our name to Snow Runner, Inc. In November 1994 we changed our name to the Sled Dogs Company. On November 5, 1997, we filed for
protection under Chapter 11 of the U.S. Bankruptcy Code. In September 1998, we emerged from protection of Chapter 11 of the U.S.
Bankruptcy Code. In May, 1999, we changed our state of domicile to Nevada and our name to XDOGS.COM, Inc. On July 22, 2005, the
Board of Directors and a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to change
the Company's name to Avalon Oil & Gas, Inc., and to increase the authorized number of shares of our common stock from 200,000,000
shares to 1,000,000,000 shares par value of $0.001, and engage in the acquisition of producing oil and gas properties. On
November 16, 2011, a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to increase
the authorized number of shares of our common stock from 1,000,000,000 shares to 3,000,000,000 shares par value of $0.001. On June 4, 2012 the Board of Directors approved
an amendment to our Articles of Incorporation to a reverse split of the issued and outstanding shares of Common Stock of the Corporation
(Shares) such that each holder of Shares as of the record date of June 4, 2012 shall receive one (1) post-split Share
on the effective date of June 4, 2012 for each three hundred (300) Shares owned. The reverse split was effective on
July 23, 2012. On September 28, 2012, we held a special meeting of Avalons shareholders and approved an
amendment to the Companys Articles of Incorporation such that the Company would be authorized to issue up to 200,000,000
shares of common stock. We filed an amendment with the Nevada Secretary of State on April 10, 2013, to increase
our authorized shares to 200,000,000. The Company is currently in the process of
raising funds to acquire oil and gas properties and related oilfield technologies, which the Company plans to develop into commercial
applications. On September 22, 2007 the Company entered into
an agreement with respect to its purchase of a 75.6% interest in Oiltek, Inc. (Oiltek) for $50,000 and the right of Oiltek to market
Avalon's intellectual property. On March 19, 2014, the Company formed Weyer
Partners, LLC, (Weyer) a one hundred percent (100%) wholly owned Minnesota Corporation. Weyer Partners, LLC, was
formed to operate oil and gas properties in Oklahoma and Texas. Weyer is consolidated in these financial statements. On May 9, 2014, the Company formed AFS Holdings,
Inc., (AFS) a one hundred percent (100%) wholly owned Nevada Corporation. AFS Holding, Inc., was formed to leverage
the Companys relationship with IP TechEx, and market technology licensed from IP TechEx. AFS is consolidated in these financial
statements. On June 5, 2015 the Company entered into an
agreement with AFS for $10,000 and the right of AFS to market the intellectual property Avalon acquired from Ronald Knight. Principles of consolidation The consolidated financial statements include
the accounts of the Company and the Companys subsidiarys Oiltek, Inc., AFS Holdings, Inc., and Weyer Partners, LLC.
All significant inter-company items have been eliminated in consolidation. Basis of Preparation of Financial Statements The accompanying unaudited consolidated
financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q. They do not include all of the information and footnotes required by Accounting
Principles generally accepted accounting principles in United States America (US GAAP) for complete financial statements
and related notes. The accompanying unaudited consolidated financial statements and related notes should be read in conjunction
with the audited consolidated financial statements of the Company and notes thereto for the year ended March 31, 2015. In the opinion of management, the accompanying
unaudited consolidated financial statements contain all adjustments (which include only normal recurring adjustments) necessary
to present fairly the balance sheets of Avalon Oil and Gas Inc. and subsidiaries as of June 30, 2015 and the results of their operations
and cash flows for the three months ended June 30, 2015 and 2014, and are not necessarily indicative of the results to be expected
for the entire year. Going Concern The June 30, 2015, consolidated financial statements
have been prepared assuming the Company will continue as a going concern. However, the Company has incurred a loss of $30,808,171 from
inception through June 30, 2015, and has a working capital deficiency of $91,353 and stockholders equity of $1,943,854
as of June 30, 2015. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.
The Company currently has minimal revenue generating operations and expects to incur substantial operating expenses in order to
expand its business. As a result, the Company expects to incur operating losses for the foreseeable future. The Company
will continue to seek equity and debt financing to meet our operating losses. The accompanying consolidated financial statements
do not include any adjustments that might become necessary should the Company be unable to continue as a going concern. Use of Estimates The preparation of financial statements in
conformity with generally accepted accounting principles generally accepted in the United States of America requires us to make
estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual
results could differ from those estimates and assumptions. Basis of Accounting The Company's financial statements are prepared
using the accrual method of accounting. Revenues are recognized when earned and expenses when incurred. Cash and Cash Equivalents Cash and cash equivalents consist primarily
of cash on deposit, certificates of deposit, money market accounts, and investment grade commercial paper that are readily convertible
into cash and purchased with original maturities of three months or less. The Company maintains its cash balances at several financial
institutions. Accounts at the institutions are insured by the Federal Deposit Insurance Corporation up to $250,000. Fair Value of Financial Instruments The Company's financial instruments are cash
and cash equivalents, accounts receivable, accounts payable, notes payable, notes receivable and long-term debt. The recorded values
of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values based on their short-term
nature. The recorded values of notes payable, notes receivable and long-term debt approximate their fair values, as interest approximates
market rates. Accounts Receivable and Receivables from the
Joint Interest Management periodically assesses the collectability
of the Company's accounts receivable and receivables from the Joint Interest. Accounts determined to be uncollectible are charged
to operations when that determination is made. The Company had an allowance for receivables from the Joint Interest of $132,811
and $131,236 as of June 30, 2015 and March 31, 2015. Oil and Natural Gas Properties The Company follows the full cost method of
accounting for natural gas and oil properties. Under the full cost concept, all costs incurred in acquiring, exploring,
and developing properties cost center are capitalized when incurred and are amortized as mineral reserves in the cost center are
produced, subject to a limitation that the capitalized costs not exceed the value of those reserves. The unamortized
costs relating to a property that is surrendered, abandoned, or otherwise disposed of are accounted for as an adjustment of accumulated
amortization, rather than as a gain or loss that enters into the determination of net income, until all Property and Equipment, net Property and equipment is reviewed for recoverability
when events or changes in circumstances indicate that its carrying value may exceed future undiscounted cash inflows. As of June
30, 2015 and March 31, 2015, the Company had not identified any such impairment. Repairs and maintenance are charged to operations
when incurred and improvements and renewals are capitalized. Property and equipment are stated at cost.
Depreciation is calculated using the straight-line method for financial reporting purposes and accelerated methods for tax purposes. Their estimated useful lives are as follows:
Office Equipment: 5-7 Years
Vehicles 5 Years Asset Retirement Obligations In accordance with the provisions of Financial
Accounting Standards Board FASB Accounting Standard Codification ASC 410-20-15, Accounting for
Asset Retirement Obligations, the Company records the fair value of its liability for asset retirement obligations in the
period in which it is incurred and a corresponding increase in the carrying amount of the related long live assets. Over time,
the liability is accreted to its present value at the end of each reporting period, and the capitalized cost is depreciated over
the useful life of the related assets. Upon settlement of the liability, the Company will either settle the obligation for its
recorded amount or incur a gain or loss upon settlement. The Company's asset retirement obligations relate to the plugging and
abandonment of its oil properties. Intellectual Property Rights, net The cost of licensed technologies acquired
is capitalized and will be amortized over the shorter of the term of the licensing agreement or the remaining life of the underlying
patents. The Company evaluates recoverability of identifiable
intangible assets whenever events or changes in circumstances indicate that intangible assets carrying amount may not be recoverable.
Such circumstances include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant
adverse change in the extent or manner in which an asset is used, or (3) an accumulation of cost significantly in excess of the
amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the assets against the
estimated undiscounted future cash flows associated with it. There was not any impairment loss for the three months ended June
30, 2015 and 2014. Should the sum of the expected cash flows be
less than the carrying amount of assets being evaluated, an impairment loss would be recognized. The impairment loss would be calculated
as the amount by which the carrying amount of the assets, exceed fair value. Estimated amortization of intangible assets over the
next five years is as follows:
March 31,
2016 $ 31,938
2017 10,650
$ 42,588
Stock Based Compensation Share awards granted to employees and independent
directors are accounted for under ASC 718, "Share-Based Payment". ASC 718-10 eliminates accounting for share-based compensation
transaction using the intrinsic value method and requires instead that such transactions be accounted for using a fair-value-based
method. The Company has elected to adopt the provisions of ASC 718-10 effective January 1, 2006, under the modified prospective
transition method, in which compensation cost was recognized beginning with the effective date (a) based on the requirements of
ASC 718-10 for all share-based payments granted after the effective date and (b) based on the requirements of ASC 718-10 for all
awards granted to employees prior to the effective date of ASC 718-10 that remain unvested on the effective date. The Company records share-based compensation
expense for awards granted to non-employees in exchange for services at fair value in accordance with the provisions of ASC 505-50,
"Equity Based" payment to non-employees. For the awards granted to non-employees, the Company will record compensation
expenses equal to the fair value of the share options at the measurement date, which is determined to be the earlier of the performance
commitment date or the service completion date. Warrants The value of warrants issued is recorded at
their fair values as determined by use of a Black Scholes Model at such time or over such periods as the warrants vest. Earnings (loss) per Common Share ASC 260-10-45, Earnings Per Share,
requires presentation of "basic" and "diluted" earnings per share on the face of the statements of operations
for all entities with complex capital structures. Basic earnings per share are computed by dividing net income by the weighted
average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could
occur if securities or other contracts to issue common stock were exercised or converted during the period. Dilutive securities
having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. Income Taxes Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards,
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 income in the period that includes the enactment date. Deferred income tax expense represents the change during
the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are
individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will
not be realized. ASC 740-10-25, Accounting for Uncertainty
in Income Taxes, is intended to clarify the accounting for uncertainty in income taxes recognized in a company's financial
statements and prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC
740-10-25 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure
and transition. Under ASC 740-10-25, evaluation of a tax position
is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained
upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position.
The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to
be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50
percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet
the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold
is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the
first subsequent financial reporting period in which the threshold is no longer met. Revenue Recognition In accordance with the requirements ASC topic
605 "Revenue Recognition", revenues are recognized at such time as (1) persuasive evidence of an arrangement exists,
(2) delivery has occurred or services have been rendered, (3) the seller's price to the buyer is fixed or determinable and (4)
collectability is reasonably assured. Specifically, oil and gas sales are recognized as income at such time as the oil and gas
are delivered to a viable third party purchaser at an agreed price. Interest income is recognized as it is earned. Recently Issued Accounting Pronouncements As of September 10, 2015, The FASB has issued up to ASU 2015 -
15, which are not expected to have a material impact on the consolidated financial statements upon adoption. |
