FAIR VALUE OF FINANCIAL INSTRUMENTS AND IMPAIRMENT

3 Months Ended

Jan. 31, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS AND IMPAIRMENT

10.  Fair Value of Financial Instruments and Impairment

   The company uses ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), to measure the fair value of certain assets and liabilities.  ASC 820 provides a framework for measuring fair value in accordance with GAAP, establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and requires certain disclosures about fair value measurements.

The fair value hierarchy is summarized below:

Level 1:

Fair value determined based on quoted prices in active markets for identical assets or liabilities.

Level 2:

Fair value determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities or quoted prices in markets that are not active.

Level 3:

Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.

The estimated fair values of the Companies' financial instruments at January 31, 2013 and October 31, 2012 are as follows:

	1/31/13		10/31/12
	Carrying Amount	Fair Value	Carrying Amount	Fair Value
ASSETS:
Cash and cash equivalents	$598,511	$598,911	$702,902	$702,902
Accounts and mortgages receivable	106,238	106,238	143,382	143,382
LIABILITIES:
Accounts payable	219,679	219,679	140,956	140,956
Accrued liabilities	205,388	205,388	311,097	311,097
Debt	$16,709,235	$16,824,674	$16,880,416	$16,988,594

   Fair Values were determined as follows:

   Cash and cash equivalents, accounts and mortgages receivable, accounts payable and accrued liabilities:  The carrying amounts approximate fair value because of the short-term maturity of these instruments.

   Amounts due to related parties: Estimating the fair value of these instruments is not practicable because the terms of these transactions could not be duplicated in the market.

   Debt: The fair value of debt is estimated using discounted cash flows based on current borrowing rates available to the Companies for similar types of borrowing arrangements.

   As of January 31, 2013, the carrying amount net of prior period impairments for land and land development costs are $20,325,604. The carrying amount net of prior period impairments for land improvements, buildings and equipment, net is $20,271,488.  An adjustment of $515,631 was recorded to both land improvements, buildings and equipment, net and deferred income due to notification received from the PA Department of Transportation stating the proposed safety rest area project along Interstate 80 has been abandoned.  This adjustment had $0 impact on the Combined Statement of Operations.  The carrying amount net of prior period impairments for land held for investment is $6,848,390. The carrying amount net of prior period impairments for long-lived assets held for sale as of January 31, 2013 is $494,323.  The assets of discontinued operations as of January 31, 2013 have a carrying value net of prior period adjustments for impairment of $166,682.  There was no impairment expense in the three months ended January 31, 2013.

   As of October 31, 2012, the carrying amount net of prior period impairments for land and land development costs are $20,359,066 less impairment expense of $7,000 in Fiscal 2012 for a revised carrying value of $20,352,066.  A certain lot included in the land and land development costs had a carrying value of $37,394 which was written down in Fiscal 2012 by an impairment charge of $7,000 due to the sale of a similar lot in Fiscal 2012, to its fair value of $30,394.  The carrying amount net of prior period impairments for land improvements, buildings and equipment, net are $21,043,068.  There was no impairment expense for land improvements, buildings and equipment, net in Fiscal 2012.  The carrying amount net of prior period impairments for land held for investment is $6,848,390.  There was no impairment on land held for investment in Fiscal 2012.  The carrying amount net of prior period impairments for long-lived assets held for sale as of October 31, 2012 was $846,174.  There was no impairment expense on long-lived assets held for sale in Fiscal 2012.  The assets of discontinued operations as of October 31, 2012 have a carrying value net of prior period adjustments for impairment of $230,382 less $63,700 impairment expense in Fiscal 2012, due to a sales agreement signed in September 2012 for this property, for a fair value of $166,682.  The overall total impairment in Fiscal 2012 was $70,700.  The impairment for long-lived assets held for sale, land and land development costs, land held for investment and assets of discontinued operations was determined using level 2 criteria wherein fair value is determined using significant observable inputs, generally either quoted prices in an active market for similar assets or liabilities or quoted prices in markets that are not active.