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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation – The consolidated financial statements include the accounts of NeoMedia Technologies, Inc. and our wholly-owned subsidiaries. We operate as one reportable segment. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates – The preparation of consolidated financial statements in conformity with US GAAP 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. Changes in facts and circumstances may result in revised estimates, which are recorded in the period in which they become known.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation - FASB ASC 718, Stock Compensation, requires that all stock-based compensation be recognized as an expense in the financial statements and that such cost be measured at the grant date fair value of the award. We account for modifications of the terms of existing option grants as exchanges of the existing equity instruments for new instruments. The fair value of the modified option at the grant date is compared with the value at that date of the original option immediately before its terms are modified. Any excess fair value of the modified option over the original option is recognized as additional compensation expense.

Earnings Per Share, Policy [Policy Text Block]

Basic and Diluted Net Income (Loss) Per Share – Basic net income (loss) per share is computed by dividing net income/(loss) attributable to common shareholders by the weighted average number of shares of our common stock outstanding during the period. During the three and nine months ended September 30, 2012 and 2011 and the nine months ended September 30, 2011, we reported net income per share and included dilutive instruments in the fully diluted net income per share calculation.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011

Numerator:
Net income (loss)	$	19,470		$	59,447		$	(21,945	)	$	12,376

Effect of dilutive securities – adjustment for:
Change in fair value of derivative liability Series C and D preferred stock and debentures		1,036			(43,727	)		-			(12,457	)
Change in fair value of derivative liability - warrants		4,897			(568	)		-			(2,263	)
Change in fair value of hybrid financial instruments		6,353			(17,631	)		-			(4,203	)
Loss on extinguishment of debt		-			-			-			-
Interest expense on convertible debt		(10	)		1,152						2,802
	$	12,276		$	(60,774	)	$	(21,945	)	$	(16,121	)
Numerator for diluted earnings per share- income (loss) available to common stockholders after assumed conversions of debentures and exercise of warrants	$	31,746		$	(1,327	)	$	(21,945	)	$	(13,745	)

Denominator
Weighted average shares used to compute basic EPS		1,510,797,881			226,839,514			1,075,605,167			97,493,073
Effect of dilutive securities:
Employee stock options		-			-			-			-
Derivative warrants		1,091,953,786			1,910,389			-			-
Convertible debentures		5,129,818,595			2,616,568,043			-			2,529,846,469
Convertible preferred stock		742,807,130			594,867,557			-			594,867,857
Dilutive potential common shares		6,964,579,511			3,213,345,989			-			3,124,714,326

Denominator for diluted earnings per share-adjusted weighted average shares and assumed conversions and exercise of options		8,475,377,392			3,440,185,503			1,075,605,167			3,222,207,399

Basic earnings per share	$	0.01		$	0.26		$	(0.02	)	$	0.13
Diluted earnings per share	$	0.00		$	(0.00	)	$	(0.02	)	$	(0.00	)

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill –Goodwill represents the excess of the purchase price paid for NeoMedia Europe over the fair value of the identifiable net assets and liabilities acquired, based on an independent appraisal of the assets and liabilities acquired. In accordance with FASB ASC 350, Intangibles - Goodwill and Other goodwill is not amortized, but is tested for impairment, at least annually, by applying the recognition and measurement provisions of FASB ASC 350, which requires that we first assess qualitative factors in our evaluation about the likelihood of goodwill impairment to determine whether it is necessary to perform the two-step quantitative goodwill impairment test of a reporting unit.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements - The following Accounting Standards Codification Updates have recently been issued:

ASU No. 2012-01	July 2012	Health Care Entities (Topic 954): Continuing Care Retirement Communities—Refundable Advance Fees

ASU No. 2012-02	July 2012	Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment

ASU No. 2012-03	August 2012	Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)

ASU No. 2012-04	October 2012	Technical Corrections and Improvements

ASU No. 2012-05	October 2012	Statement of Cash Flows (Topic 230): Not-for-Profit Entities: Classification of the Sale Proceeds of Donated Financial Assets in the Statement of Cash Flows (a consensus of the FASB Emerging Issues Task Force)

ASU No. 2012-06	October 2012	Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution (a consensus of the FASB Emerging Issues Task Force)

ASU No. 2012-07	October 2012	Entertainment—Films (Topic 926): Accounting for Fair Value Information That Arises after the Measurement Date and Its Inclusion in the Impairment Analysis of Unamortized Film Costs (a consensus of the FASB Emerging Issues Task Force)

To the extent appropriate, the guidance in the above Accounting Standards Codification Updates is already reflected in our consolidated financial statements and management does not anticipate that these accounting pronouncements will have any material future effect on our consolidated financial statements.

- Definition

Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.

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- Definition

Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement.

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- Definition

Disclosure of accounting policy for the use of estimates in the preparation of financial statements in conformity with generally accepted accounting principles.

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