VISION GLOBAL SOLUTIONS INC.
----------------------------
455 NOTRE DAME STREET EAST
MONTREAL, QUEBEC,
CANADA H2Y 1C9
March 31, 2006
Securities and Exchange Commission
450 Northwest Avenue
Washington D.C.
20549-0304
RE: VISION GLOBAL SOLUTIONS INC.
FORM 10-KSB FOR FISCAL YEAR ENDED MARCH 31, 2005
FILED JULY 19, 2005
FILE NO. 000-31104
Dir Sir/Madam:
In response to your letter of January 25, 2006:
Form 10-KSB for the Fiscal Year Ended March 31, 2005 Financial Statements
Independent Auditor's Report
1. We note that you engage a Canadian audit firm to work with your U.S.
auditors in the performance of your annual audits. Please note that
non-U.S. public accounting firms that play a substantial role in the
preparation or issuance of audit reports for public issuers must be
registered with the PCAOB. Please describe the services performed by the
Canadian audit firm and explain how you considered the definition of
"substantial role" provided in PCAOB Rule 1001.
ANSWER:
The audit of the Company's financial statements was performed in
accordance with the procedures required by professional standards
established by the Public Company Oversight Board of the Commission
and auditing standards generally accepted in the United States.
These standards and qualifications do not vary from state to state
and, accordingly, we believe that the audit satisfies the
requirements of the Commission. Rule SX 2-01 requires that an
accountant be licensed and in good standing under the laws of the
place of the accountant's residence or principal office. The rule is
silent as to whether or not the accountant's state or country of
licensure must coincide with the location of the registrant's
corporate offices or place where the registrant conducts its
principal operations.
Notes to Consolidated Financial Note 1 Note 1 - Summary of Accounting
Policies
Revenue Recognition
-------------------
2. We have read your response to prior comment number 5 and note that you
have not addressed the inconsistencies between the disclosures in your
MD&A and your revenue recognition policy in the financial statements. We
further note that your response, which indicates that revenue from
modification services is recognized once the modifications have been
completed, installed and accepted by the customer, appears to be
inconsistent with your MD&A disclosures that revenue from such services
are recognized using the percentage-of-completion method pursuant to SOP
81-I . Please reconcile your disclosures within your MD&A, revenue
recognition policy, and your response.
ANSWER: The Company recognizes revenue when modifications have been
completed, installed and accepted. Revenue is not recorded on the
percentage of completion method. We will modify or revenue
recognition policy and MD&A to reflect this.
3. Your response to prior comment number 7 indicates that you establish VSOE
based on the price when the element is sold separately yet this appears to
contradict the disclosure in your revenue recognition policy. Please
revise your disclosure to disclose how VSOE is established for each of the
elements included in your multiple element arrangements as well as the
fact that you utilize the residual method.
ANSWER: The Company's license agreements generally include the
provision of telephone customer support and may also include basic
training and consultation services. These services are billed
separately and revenue is recognized on a straight-line basis over
the term of the contract. The Company does not have any multiple
arrangements. We will revise our disclosure in the MDA and revenue
recognition policy to conform.
Consolidated Statement of Stockholders' Deficit
4. For multiple-element arrangements that include term licenses, please
describe to us the length of both the license terms and the related
maintenance periods and explain how you determine that VSOE exists for the
maintenance. As part of your response, address the guidance in AICPA
Technical Practice Aids 5100.53 and 5100.54.
ANSWER:
The Company's software license agreements typically include
licensing of software and providing of post-contract customer
support ("PCS"), which includes post-contract technical support and
unspecified product upgrades and updates. The software license term
generally ranges from 12 to 36 months, with some arrangements having
terms up to 60 months. The PCS term is normally the same as the
license term.
For those licenses that are renewable annually, the Company applies
TPA 5100.53, "Fair value of PCS in a Short-Term Time-Based License
and Software Revenue Recognition", which was issued in May 2000, and
effective July 1, 2000. In accordance with TPA 5100.53 the Company
is not able to objectively demonstrate VSOE of fair value for PCS,
due to the short timeframe. Therefore the Company recognizes the
license fee and the PCS ratably over the PCS term, i.e., 12 months,
as provided in TPA 5100.53.
The Company does not have any PCS agreements over one year so AICPA
Technical Practice Aid ("TPA") 5100.54, "Fair Value of PCS in a
Multi-Year Time-Based License and Software Revenue Recognition" is
not applicable.
Consent of Independent Auditors
- -------------------------------
5. Please revise to provide updated consents for Jewett, Schwarz, &
Associates and for Malone & Bailey, PC. Please note that both consents
should be dated.
ANSWER: We will provide the revised requisite consents in our
amended filing.
Section 302 Certifications
- --------------------------
6. We note your response to prior comment number 9. Please revise your
Certifications to reflect the quarter ended March 31, 2005. As previously
requested, tell us how you considered the transition guidance included in
III.E of SEC Release 33-8238. In this regard, we note that you have
provided certification related to your internal control over financial
reporting by including paragraph 4 (b).
ANSWER: We will revise our Certifications to reflect the quarter
ended March 31, 2005. Management of the Company, in anticipation of
the transition referenced in III.E of SEC Release 33-8238 have
reviewed their internal control structures and procedures for
financial reporting, including evaluating and testing our internal
control over financial reporting. As a consequence of the new
measure, we are able to provide the Certifications required under
Section 302 and 906.
On behalf of the Company, we hereby affirm the following:
o the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
o staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action with
respect to the filing; and
o the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
Sincerely,
/s/ Jean-Paul Ouellette
- ------------------------------------
Jean-Paul Ouellette.