Reconciliation Statement: Qualytextil SA Brazilian GAAP to US GAAP (Three Months Ended April 30, 2008)
Summary
This document outlines the reconciliation of Qualytextil SA's financial statements from Brazilian GAAP to US GAAP for the three months ending April 30, 2008. It details adjustments such as reclassification of interest, recognition of capital reserve reversals, treatment of government tax incentives, and accruals for legal fees, management compensation, and outsourcing costs. The statement also explains the translation of financial data using monthly exchange rates. The purpose is to align the company's financial reporting with US accounting standards for regulatory compliance.
EX-10.30 9 v176896_ex10-30.htm
Exhibit 10.30
NOTES TO: QUALYTEXTIL SA - Reconciliation of Brazilian GAAP to US GAAP
Three months ended April 30, 2008
| (a) Reclassify interest expense and interest income out of "net financial" | |||||
| (b) Capital reserve reversal recognized as income | (b) | 47,944 | |||
| (c) Reclassify a government VAT tax incentive as a reduction of cost of goods sold | (c ) | 94,149 | |||
| (d) Not used | |||||
| (e) Net adjustment to administrative expenses | |||||
| Legal fees not accrued under Brazilian GAAP - difference in opening and ending accruals | (1,348 | ) | |||
| Management compensation not accrued under Brazilian GAAP - charge to earlier period | (107,266 | ) | |||
| Outsourcing sales contractor invoices recorded one month in arrears - difference in opening and ending accruals | 15,457 | ||||
| Outsourcing labor contractor invoices recorded one month in arrears - reverse beginning accrual | (22,930 | ) | |||
| (e) Net adjustment to administrative expenses | (e) | (116,087 | ) | ||
| (f) Net adjustment to cost of goods sold | |||||
| inventory reserve not recorded under Brazilian GAAP - charged to earlier periods | (73,367 | ) | |||
| reclassify a government VAT tax incentive (ICMS) as a reduction of cost of goods sold | (c ) | (94,149 | ) | ||
| Outsourcing labor contractor invoices recorded one month in arrears - reverse beginning accrual | (48,106 | ) | |||
| (f) Net adjustment to cost of goods sold | (f) | (215,622 | ) | ||
| (g) Income tax accrual to adjust to US GAAP income | (g) | 52,760 | |||
| (h) The three month statement of profit and loss has been derived from the internally generated monthly financial statements. These financial statements have been translated using the rate applicable to each month. The exchange rate of $1.71288 represents a weighted average of the monthly rates used. | |||||
