2007 annual report aveiro investment corp. - First West Properties

NOTES TO THE FINANCIAL STATEMENTS June 30, 2007 and 2006
1. ORGANIZATION AND NATURE OF BUSINESS
The Company (formerly Dagger Resources Inc.) was incorporated under the Alberta Business Corporations Act on June 7,
1996 and its articles were amended on June 24, 1996. The Company was an inactive public company until August 21, 2006,
when the Board of Directors and management were changed and a new business plan was adopted.
The Company is an Alberta based real estate investment company building a portfolio of real estate assets in secondary
markets in western Canada consisting primarily of income producing properties in addition to other real estate to which
management can conduct activity to provide fundamental value growth.
These fi nancial statements have been prepared on the basis of a going concern. Should the going concern assumption
not be applicable, then adjustments would be required to the carrying value of the Company’s net assets and to its statements
of operations.
2. BASIS OF PRESENTATION
The Company prepares fi nancial statements in accordance with Canadian generally accepted accounting principles.
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Income taxes
The Company uses the liability method of accounting for future income taxes whereby future income tax assets and
liabilities are determined based on temporary differences between the accounting basis and the tax basis of the assets and
liabilities, and are measured using the substantively enacted tax rates and laws expected to apply when these differences
reverse. In assessing whether the future tax assets are realizable, management considers whether it is more likely than
not that some portion or all of the future tax assets will not be realized. The ultimate realization of future tax assets,
consisting of loss carryforwards and taxable temporary differences, is dependent upon the generation of future taxable
income during the periods in which those temporary differences and tax loss carryforwards can be utilized.
(b) Revenue recognition
Revenue from income-producing properties includes rents earned from tenants under lease agreements, realty tax and
operating costs recoveries and other incidental income and is recognized as revenue over the term of the underlying
leases. All rent increases based on escalation clauses in lease agreements are accounted for on a straight-line basis over
the term of the respective leases.
(c) Per share amounts
Basic earnings per share is computed by dividing the net loss by the weighted average shares outstanding during the
reporting year. Diluted earnings per share is calculated by using the treasury stock method. This method assumes that
proceeds received from the exercise of in-the-money options are used to repurchase shares at the average market price
for the period.
Aveiro Investment Corp. | 2007 Annual Report | 35