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NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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12 Months Ended |
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Dec. 31, 2012
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| Significant Accounting Policies [Text Block] |
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 on 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.
Revenue
Recognition
The
Company’s revenue relates to license fees received for
the use of its technology. The license fee revenue requires
no continuing performance on the Company’s part and is
recognized upon receipt of the licensing fee and grant of the
license.
During
2012, the Company granted a 25-year technology license
agreement for a one-time license fee of $750,000. The first
installment of the license fee $375,000 has been collected
pursuant to the signing of a pilot plant construction
contract and the balance of $375,000 will be due upon the
successful testing of the pilot plant, estimated to be in
mid-2013. In addition, under the technology license
agreement, the Company will receive an on-going royalty fee
of $1 per metric ton on all coal processed using the
technology, up to $4,000,000 per annum. As a result of this
transaction, Clean Coal emerged from the development
stage.
Earnings
per Common Share
Basic
earnings per share are computed on the basis of the weighted
average number of common shares outstanding during each year.
Diluted earnings per share are the same as basic earnings per
share as common stock equivalent.
Cash
and Cash Equivalents
Clean
Coal considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents for
purposes of preparing its Statement of Cash Flows.
Federal
Income Tax
Clean
Coal accounts for income taxes pursuant to the provisions of
FASB ASC 740 which requires an asset and liability approach
to calculating deferred income taxes. The asset and liability
approach requires the recognition of deferred tax liabilities
and assets for the expected future tax consequences of
temporary differences between the carrying amounts and the
tax basis of assets and liabilities.
Property
and Equipment
Property
and equipment consists of furniture and fixtures and computer
equipment, recorded at cost, depreciated upon placement in
service over estimated useful lives ranging from three to
five years on a straight-line basis. As of December 31, 2012
and 2011, Clean Coal had property and equipment of $128 and
$331, respectively, net of accumulated depreciation of $891
and $688, respectively. Expenditures for normal repairs and
maintenance are charged to expense as incurred. Depreciation
expense for the years ended December 31, 2012 and 2011totaled
$203 and $204, respectively.
Impairment
of Long Lived Assets
In
the event facts and circumstances indicate the carrying value
of a long-lived asset, including associated intangibles, may
be impaired, an evaluation of recoverability is performed by
comparing the estimated future undiscounted cash flows
associated with the asset to the asset's carrying amount to
determine if a write-down to market value or discounted cash
flow is required. There was no impairment recorded during the
years ended December 31, 2012 and 2011.
Research
and Development Costs
Research
and development expenses include salaries, related employee
expenses, research expenses and consulting fees. All costs
for research and development activities are expensed as
incurred. Clean Coal expenses the costs of licenses of
patents and the prosecution of patents until the issuance of
such patents and the commercialization of related products is
reasonably assured.
Stock-based
Compensation
FASB
ASC 718 established financial accounting and reporting
standards for stock-based employee compensation plans. It
defines a fair value based method of accounting for an
employee stock option or similar equity instrument. Clean
Coal accounts for compensation cost for stock option plans in
accordance with FASB ASC 718. Clean Coal accounts for share
based payments to non-employees in accordance with FASB ASC
505-50.
Reclassifications
Certain
prior period amounts have been reclassified to conform to
current period presentation.
Recently
Issued Accounting Pronouncements
The
Company does not expect the adoption of any recently issued
accounting pronouncements to have a significant impact on its
financial position, results of operations or cash
flows.
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