Alarmforce Industries Inc.: Adoption of New Accounting Policy Resulting in Restatement of Financial Results.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- AlarmForce Industries Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :AF) (the "Corporation") announced that it is restating the financial statements for the first 3 quarters for the year ended October October: see month. 31, 2004 and the corresponding comparative 3 quarters and annual figures for the year ended October 31, 2003. The Corporation is adopting a new accounting policy reflecting the recommendations of The Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. Emerging Issues Committee Abstract 142 "Revenue Arrangements with Multiple Deliverables" issued in December December: see month. 2003, regarding the timing of revenue recognition and the classification of certain items as revenue or expense.The recommendations allow for either prospective or retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a application of this accounting policy. The Corporation has decided to adopt retroactive application of the accounting policy as the more appropriate alternative and therefore the financial statements are being restated. As a result of the adoption of the new accounting policy, installation revenue and related costs from system add-ons for both new and existing subscribers are deferred and amortized over four years, representing the term of the subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. monitoring agreement. Prior to adopting this policy, the revenue and corresponding expense were recognized at the completion of the sales transaction. Revenue from system add-ons represented 7.5 % of the company's total revenue in the first 3 quarters of 2004, and 7.0 % for the fiscal year ended October 31, 2003. Notably, the restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. does not affect any previously reported figures for cash flow or the number of subscribers, which continues to grow at 20% per annum Per annum Yearly. . As a result of adopting the new policy, Revenues decreased by 3.4% or $ 424,701 for the fiscal year ended October 31, 2003, and Net Income decreased by$177,000. Revenues for the nine months of the fiscal year ended October 31, 2004 decreased by 3.5% or $ 391,932 and Net Income decreased by a total of $163,000. For the fiscal year ended October 31, 2003, Diluted Earnings per Share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of decreased by $ 0.018. Diluted Earnings per Share for the nine months of the fiscal year ended October 31, 2004 decreased by a total of $ 0.015. Key changes to revenue and income accounts have been highlighted in the charts below:
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Revenue
Cumulative
Period Reported Decrease Restated
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2003
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Nov 1 2002 - Jan 31, 2003 3 months $2,940,483 $93,434 $2,847,049
Nov 1 2002 - April 30, 2003 6 months $6,007,161 $191,116 $5,816,045
Nov 1 2002 - July 31, 2003 9 months $9,184,606 $293,044 $8,891,562
Nov 1 2002 -Oct 31, 2003 12 months $12,520,851 $424,701 $12,096,150
2004
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Nov 1 2003 -Jan 31 2004 3 months $3,542,387 $124,964 $3,417,423
Nov 1 2003 - April 30, 2004 6 months $7,194,415 $255,608 $6,938,807
Nov 1 2003 - July 31, 2004 9 months $11,023,526 $391,932 $10,631,594
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Income Before
Income Taxes
Cumulative
Period Reported Decrease
Restated
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2003
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Nov 1 2002 - Jan 31 2003 3 months $523,021 $61,462 $461,559
Nov 1 2002 - April 30, 2003 6 months $1,143,934 $125,717 $1,018,217
Nov 1 2002 - July 31, 2003 9 months $1,548,961 $192,766 $1,356,195
Nov 1 2002 - Oct 31, 2003 12 months $2,219,442 $279,372 $1,940,070
2004
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Nov 1 2003 -Jan 31 2004 3 months $680,366 $81,345 $599,021
Nov 1 2003 - April 30, 2004 6 months $1,679,987 $166,388 $1,513,599
Nov 1 2003 -July 31, 2004 9 months $2,261,037 $255,128 $2,005,909
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Revenue
Cumulative
Period Reported Decrease Restated
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2003
----------------------------------------------------------------------
Nov 1 2002 -Jan 31 2003 3 months $309,737 $38,967 $270,770
Nov 1 2002 - April 30, 2003 6 months $717,366 $79,705 $637,661
Nov 1 2002 -July 31, 2003 9 months $910,382 $122,214 $788,168
Nov 1 2002 -Oct 31, 2003 12 months $1,367,580 $177,122 $1,190,458
2004
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Nov 1 2003 -Jan 31 2004 3 months $428,057 $51,980 $376,077
Nov 1 2003 - April 30, 2004 6 months $1,000,574 $106,322 $894,252
Nov 1 2003 - July 31, 2004 9 months $1,249,499 $163,027 $1,086,472
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Income Before
Income Taxes
Cumulative
Period Reported Decrease
Restated
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2003
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Nov 1 2002 -Jan 31 2003 3 months $0.033 $0.004
$0.029
Nov 1 2002 - April 30, 2003 6 months $0.076 $0.008
$0.068
Nov 1 2002 - July 31, 2003 9 months $0.095 $0.013
$0.082
Nov 1 2002 - Oct 31, 2003 12 months $0.140 $0.018
$0.122
2004
Nov 1 2003 - Jan 31 2004 3 months $0.041 $0.005
$0.036
Nov 1 2003 - April 30, 2004 6 months $0.010 $0.001
$0.009
Nov 1 2003 -July 31, 2004 9 months $0.114 $0.015
$0.099
The above sets out certain changes to the financial statements; however, for more details on the changes to the statements, refer to the restated financial statements, which will be available to the public on SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review at www.sedar.com by February February: see month. 21, 2005. AlarmForce Industries Inc. is Canada's largest manufacturer and installer of two-way voice home alarm systems and line-cut protection with offices across Canada Across Canada was an afternoon program that formerly aired on The Weather Network. The segment ran from early 1999 until mid 2002. The show ran from 3:00PM ET until 7:00 PM ET. and over 50,000 subscribers. ALARMFORCE INDUSTRIES INC. (TSX:AF) |
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