Tungsten Corp. - FORM 10-Q - XML - IDEA: XBRL DOCUMENT - December 16, 2011

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION - UNAUDITED INTERIM FINANCIAL INFORMATION

The accompanying  unaudited interim financial  statements and related notes have

been prepared in accordance with accounting principles generally accepted in the

United States of America ("U.S.  GAAP") for interim financial  information,  and

with the rules and  regulations  of the United  States  Securities  and Exchange

Commission  ("SEC") to Form 10-Q and Article 8 of Regulation  S-X.  Accordingly,

they do not include all of the information  and footnotes  required by U.S. GAAP

for complete financial  statements.  The unaudited interim financial  statements

furnished  reflect all  adjustments  (consisting of normal  recurring  accruals)

which are, in the opinion of  management,  necessary to a fair  statement of the

results for the interim periods  presented.  Interim results are not necessarily

indicative of the results for the full fiscal year.  These financial  statements

should be read in conjunction  with the financial  statements of the Company for

the fiscal  year ended  January  31,  2011 and notes  thereto  contained  in the

Company's Annual Report on Form 10-K as filed with the SEC on May 15, 2011.

DEVELOPMENT STAGE COMPANY

The Company is a development  stage  company as defined by section  810-10-20 of

the FASB  Accounting  Standards  Codification.  The  Company  is still  devoting

substantially  all of its efforts on  establishing  the business and its planned

principal operations have not commenced.  All losses accumulated since inception

have been considered as part of the Company's exploration stage activities.

USE OF ESTIMATES

The  preparation  of the  Company's  financial  statements  in  conformity  with

accounting   principles   generally  accepted  in  the  United  States  requires

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  amount of revenues and

expenses during the reporting period.

The  Company's  significant  estimates  include  the  fair  value  of  financial

instruments;  income tax  provision  and  valuation  allowance  of deferred  tax

assets;  and the  assumption  that the Company will continue as a going concern.

Those  significant  accounting  estimates or assumptions bear the risk of change

due to the fact that there are  uncertainties  attached  to those  estimates  or

assumptions,  and certain  estimates or assumptions  are difficult to measure or

value.

Management  bases  its  estimates  on  historical   experience  and  on  various

assumptions  that are believed to be  reasonable  under the  circumstances,  the

results of which form the basis for making  judgments  about the carrying values

of assets and liabilities that are not readily apparent from other sources.

Management   regularly  reviews  its  estimates  utilizing  currently  available

information,  changes  in facts and  circumstances,  historical  experience  and

reasonable  assumptions.  After such reviews,  and if deemed appropriate,  those

estimates  are  adjusted  accordingly.  Actual  results  could differ from those

estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows  paragraph  825-10-50-10  of the FASB  Accounting  Standards

Codification for disclosures  about fair value of its financial  instruments and

paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph

820-10-35-37") to measure the fair value of its financial instruments. Paragraph

820-10-35-37  establishes  a framework  for  measuring  fair value in  generally

accepted  accounting  principles (U.S. GAAP), and expands disclosures about fair

value  measurements.  To increase  consistency and  comparability  in fair value

measurements and related disclosures,  Paragraph 820-10-35-37 establishes a fair

value  hierarchy which  prioritizes  the inputs to valuation  techniques used to

measure fair value into three (3) broad levels.  The fair value  hierarchy gives

the  highest  priority  to quoted  prices  (unadjusted)  in active  markets  for

identical assets or liabilities and the lowest priority to unobservable  inputs.

The three (3) levels of fair value hierarchy  defined by Paragraph  820-10-35-37

are described below:

Level 1   Quoted market prices  available in active markets for identical assets

          or liabilities as of the reporting date.

Level 2   Pricing inputs other than quoted prices in active markets  included in

          Level 1, which are either directly or indirectly  observable as of the

          reporting date.

Level 3   Pricing   inputs  that  are  generally   observable   inputs  and  not

          corroborated by market data.

Financial  assets are  considered  Level 3 when their fair values are determined

using pricing models,  discounted cash flow  methodologies or similar techniques

and at least one significant model assumption or input is unobservable.

The  fair  value  hierarchy   gives  the  highest   priority  to  quoted  prices

(unadjusted)  in active  markets for  identical  assets or  liabilities  and the

lowest  priority  to  unobservable  inputs.  If the inputs  used to measure  the

financial  assets and  liabilities  fall  within  more than one level  described

above, the categorization is based on the lowest level input that is significant

to the fair value measurement of the instrument.

The carrying amounts of the Company's financial assets and liabilities,  such as

cash, prepaid expenses, accounts payable and accrued expenses, approximate their

fair values because of the short maturity of these instruments.

Transactions  involving  related parties cannot be presumed to be carried out on

an arm's-length basis, as the requisite  conditions of competitive,  free-market

dealings may not exist. Representations about transactions with related parties,

if made, shall not imply that the related party transactions were consummated on

terms equivalent to those that prevail in arm's-length  transactions unless such

representations can be substantiated.

It is not  however,  practical  to  determine  the fair value of  advances  from

stockholders due to their related party nature.

FISCAL YEAR END

The Company elected January 31 as its fiscal year ending date.

CASH EQUIVALENTS

The Company  considers all highly liquid  investments  with  maturities of three

months or less at the time of purchase to be cash equivalents.

RELATED PARTIES

The  Company  follows   subtopic   850-10  of  the  FASB  Accounting   Standards

Codification 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 fair value  option  under the Fair Value

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 consolidated or combined

financial statements is not required in those statements.  The disclosures shall

include:  a. the nature of the  relationship(s)  involvedb.  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. mounts 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.

COMMITMENT AND CONTINGENCIES

The  Company  follows   subtopic   450-20  of  the  FASB  Accounting   Standards

Codification  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 that it is probable that a material

loss has been 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 potentially 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.

REVENUE RECOGNITION

The Company applies  paragraph  605-10-S99-1  of the FASB  Accounting  Standards

Codification for revenue recognition.  The Company recognizes revenue when it is

realized or realizable and earned.  The Company  considers  revenue  realized or

realizable and earned when all of the following criteria are met: (i) persuasive

evidence of an  arrangement  exists,  (ii) the  product has been  shipped or the

services have been  rendered to the customer,  (iii) the sales price is fixed or

determinable, and (iv) collectability is reasonably assured.

INCOME TAXES

The  Company  follows  Section  740-10-30  of  the  FASB  Accounting   Standards

Codification,  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  Company  adopted  section  740-10-25  of  the  FASB  Accounting   Standards

Codification   ("Section   740-10-25").    Section   740-10-25   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 Section 740-10-25,

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

fifty percent  (50%)  likelihood  of being  realized  upon ultimate  settlement.

Section  740-10-25  also provides  guidance on  de-recognition,  classification,

interest  and  penalties  on income  taxes,  accounting  in interim  periods and

requires increased  disclosures.  The Company had no material adjustments to its

liabilities for unrecognized  income tax benefits according to the provisions of

Section 740-10-25.

The estimated future tax effects of temporary  differences between the tax basis

of assets and liabilities are reported in the accompanying  consolidated 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

consolidated  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.

NET LOSS PER COMMON SHARE

Net loss per common share is computed  pursuant to section 260-10-45 of the FASB

Accounting Standards  Codification.  Basic net loss per common share is computed

by dividing  net loss by the weighted  average  number of shares of common stock

outstanding during the period to reflect the potential dilution that could occur

from common shares issuable  through  contingent  shares  issuance  arrangement,

stock  options or  warrants.  Diluted  net loss per common  share is computed by

dividing net loss by the weighted  average  number of shares of common stock and

potentially outstanding shares of common stock during each period.

There were no potentially  dilutive shares outstanding as of October 31, 2011 or

2010.

CASH FLOWS REPORTING

The Company adopted  paragraph  230-10-45-24  of the FASB  Accounting  Standards

Codification  for cash flows  reporting,  classifies  cash receipts and payments

according  to  whether  they  stem  from  operating,   investing,  or  financing

activities and provides  definitions of each category,  and uses the indirect or

reconciliation  method ("Indirect method") as defined by paragraph  230-10-45-25

of the FASB  Accounting  Standards  Codification  to  report  net cash flow from

operating  activities  by adjusting  net income to reconcile it to net cash flow

from  operating  activities by removing the effects of (a) all deferrals of past

operating  cash  receipts  and  payments  and all  accruals of  expected  future

operating  cash receipts and payments and (b) all items that are included in net

income that do not affect  operating  cash  receipts and  payments.  The Company

reports the reporting currency  equivalent of foreign currency cash flows, using

the  current  exchange  rate at the time of the cash  flows  and the  effect  of

exchange  rate  changes  on cash held in foreign  currencies  is  reported  as a

separate item in the reconciliation of beginning and ending balances of cash and

cash  equivalents  and  separately  provides  information  about  investing  and

financing  activities  not  resulting in cash receipts or payments in the period

pursuant  to   paragraph   830-230-45-1   of  the  FASB   Accounting   Standards

Codification.

SUBSEQUENT EVENTS

The Company  follows the guidance in Section  855-10-50  of the FASB  Accounting

Standards Codification for the disclosure of subsequent events. The Company will

evaluate  subsequent  events through the date when the financial  statements are

issued.  Pursuant to ASU 2010-09 of the FASB Accounting Standards  Codification,

the Company as an SEC filer considers its financial  statements issued when they

are widely distributed to users, such as through filing them on EDGAR.

RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2011, the FASB issued the FASB  Accounting  Standards  Update No. 2011-04

"Fair Value  Measurement"  ("ASU 2011-04").  This amendment and guidance are the

result of the work by the FASB and the IASB to develop common  requirements  for

measuring   fair  value  and  for  disclosing   information   about  fair  value

measurements in accordance with U.S. GAAP and International  Financial Reporting

Standards (IFRSs).

This update does not modify the  requirements  for when fair value  measurements

apply;  rather,  they generally  represent  clarifications on how to measure and

disclose  fair  value  under ASC 820,  Fair  Value  Measurement,  including  the

following revisions:

     *    An  entity  that  holds a group  of  financial  assets  and  financial

          liabilities  whose market risk (that is, interest rate risk,  currency

          risk, or other price risk) and credit risk are managed on the basis of

          the  entity's  net risk  exposure  may apply an  exception to the fair

          value  requirements  in ASC  820 if  certain  criteria  are  met.  The

          exception  allows  such  financial  instruments  to be measured on the

          basis of the reporting  entity's net,  rather than gross,  exposure to

          those risks.

     *    In the absence of a Level 1 input,  a reporting  entity  should  apply

          premiums  or  discounts  when  market  participants  would  do so when

          pricing the asset or liability consistent with the unit of account.

     *    Additional disclosures about fair value measurements.

The amendments in this Update are to be applied  prospectively and are effective

for public entity during interim and annual periods beginning after December 15,

2011.

In June 2011, the FASB issued the FASB Accounting Standards Update No. 2011-05 "

Comprehensive  Income ("ASU  2011-05"),  which was the result of a joint project

with the IASB and amends  the  guidance  in ASC 220,  Comprehensive  Income,  by

eliminating the option to present components of other comprehensive income (OCI)

in the statement of stockholders'  equity.  Instead,  the new guidance now gives

entities  the option to present all  nonowner  changes in  stockholders'  equity

either  as a single  continuous  statement  of  comprehensive  income  or as two

separate but consecutive statements.  Regardless of whether an entity chooses to

present comprehensive income in a single continuous statement or in two separate

but  consecutive  statements,  the  amendments  require  entities to present all

reclassification adjustments from OCI to net income on the face of the statement

of comprehensive income.

The  amendments  in  this  Update  should  be  applied  retrospectively  and are

effective for public entity for fiscal years,  and interim  periods within those

years, beginning after December 15, 2011.

Management  does  not  believe  that  any  other  recently  issued,  but not yet

effective accounting pronouncements, if adopted, would have a material effect on

the accompanying consolidated financial statements.