1. ORGANIZATION AND BUSINESS OPERATIONS
PetroTerra CORP (the Company) was incorporated under the laws of the State of Nevada, U.S. on July 25, 2008. The Company is in the development stage as defined under Accounting Codification Standard, Development Stage Entities (ASC-915) and intends to organize individual and group tourism as well as business support in Ukraine. The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception on July 25, 2008 through September 30, 2012 the Company has accumulated losses of $66,088.
2. GOING CONCERN
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $66,088 as of September 30, 2012 and further losses are anticipated in the development of its business raising substantial doubt about the Companys ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a)Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
b) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The companys cash is petty cash in the possession of the sole director of the Company.
c) Use of Estimates and Assumptions
The preparation of 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 amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
In managements opinion, all adjustments necessary for a fair statement of the results for the interim periods have been made, and all adjustments are of a normal recurring nature.
d) Foreign Currency Translation
The Company's functional currency and its reporting currency is the United States dollar.
e) Stock-based Compensation
In September, 2009 the FASB issued ASC-718, Stock Compensation. ASC-718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. Under ASC-718, the Company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at date of adoption.
f) Income Taxes
Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
g) Basic and Diluted Loss Per Share
The Company computes loss per share in accordance with ASC-260, Earnings per Share which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.
h) Fiscal Periods
The Company's fiscal year end is March 31.
i) Recent accounting pronouncements
We have reviewed all the recent accounting pronouncements issued to date, and we do not believe any of these pronouncements will have a material impact on the company.
j) Revenue Recognition
The Company will recognize revenue in accordance with Accounting Standards Codification No. 605, Revenue recognition ("ASC-605"), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $0 in advertising costs during the period July 25, 2008 (inception) to September 30, 2012.
4. COMMON STOCK
Companys authorized capital is 220,000,000 shares consisting of 200,000,000 shares of common stock and 20,000,000 shares of preferred stock, both with a par value of $0.001 per share.
On January 3, 2012 the Company completed a forward stock split whereby every pre-split share of common stock is exchangeable for 32 shares of post-split common stock. Accordingly, all share and per share information has been restated to retroactively show the effect of the stock split.
On November 28, 2008, the Company issued 28,800,000 post-split shares of common stock at a price of $0.00003125 per share for total cash proceeds of $900.
On December 4, 2008, the Company issued 64,000,000 post-split shares of common stock at a price of $0.00003125 per share for total cash proceeds of $2,000.
During the period December 10, 2008 to March 19, 2009, the Company issued 60,480,000 post-split shares of common stock at a price of $0.0003125 per share for total cash proceeds of $18,900.
During the period July 25, 2008 (inception) to March 31, 2009, the Company sold a total of 153,280,000 shares of common stock for total cash proceeds of $21,800.
On December 14, 2011, in connection with the change in directors, two controlling shareholders cancelled an aggregate of 47,744,000 shares of Common Stock which were returned to the status of authorized but unissued shares.
On the same day, 512,000 new common shares were issued to a director for services valued at $0.0003125 per share.
As of and September 30, 2012, the Company had 106,048,000 shares of common stock issued and outstanding.
5. INCOME TAXES
As of September 30, 2012, the Company had net operating loss carry forwards of approximately $66,088 that may be available to reduce future years taxable income through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
6. RELATED PARTY TRANSACTIONS
As of September 30, 2012 the total amount loaned to the company by a director was $40,565. The loan is non-interest bearing, due upon demand and unsecured.
7. SUBSEQUENT EVENT
The Company has evaluated subsequent events from September 30, 2012 through the filing date of these financial statements and has determined that there are no items to disclose.