|
Value-Added Tax Receivable
|
6 Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Apr. 30, 2012
|
|||||||||||||||||||||
| Value-Added Tax Receivable [Abstract] | |||||||||||||||||||||
| Value-Added Tax Receivable | NOTE 6 – VALUE-ADDED TAX RECEIVABLE Value-added tax ("IVA") receivable relates to IVA paid in Mexico and Gabon. As a result of IVA collections in Mexico during the six months ended April 30, 2012, the Company estimates net IVA of $2,112,951 will be received within twelve months of the balance sheet date. The remaining net IVA of $476,320 has been classified as long-term. During 2008, the Company filed IVA tax returns with the Mexican authorities to recover IVA taxes paid by its Mexican subsidiaries from 2005 through 2008. The Mexican authorities reviewed the IVA tax returns filed and requested the Company provide copies of supporting documentation for amounts filed. During 2008 and 2009, the Company worked extensively with IVA tax consultants and Mexican authorities to provide the requested documentation and answer questions related to these tax returns, but was unable to recover the IVA tax amounts. As the result of these difficulties, the Company applied for authorization before the tax authorities to transfer the tax office jurisdiction to Mexico City beginning in the 2012 fiscal year. During December 2011 the Company received this authorization and the Company filed IVA tax returns in Mexico City for calendar years 2007 to 2011 during the six months ended April 30, 2012. As of April 30, 2012, the Company has received $951,556 inclusive of interest related to the tax returns filed for calendar years 2007 to 2011. Management evaluated the IVA receivable and decreased the allowance for uncollectible taxes to $MXN 6.9 million or $528,888. The allowance for uncollectible taxes was estimated by management based upon a number of factors including the length of time the returns have been outstanding, general economic conditions in Mexico and estimated net recovery after commissions. During the six months ended April 30, 2012, a recovery of uncollectible IVA of $MXN 10.5 million or $808,883 has been recorded. A summary of the changes in the allowance for uncollectible taxes for the six months ended April 30, 2012 is as follows:
|