Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Basis of Accounting, Policy [Policy Text Block]

(a) Basis of presentation:

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") applicable to annual financial information and with the rules and regulations of the United States Securities and Exchange Commission. The financial statements include the accounts of the Company's subsidiaries:

Company	Registered	% Owned
Shoal Media (Canada) Inc.	British Columbia, Canada		100	%
Coral Reef Marketing Inc.	Anguilla		100	%
Kidoz Ltd.	Israel		100	%
Rooplay Media Ltd.	British Columbia, Canada		100	%
Rooplay Media Kenya Limited	Kenya		100	%
Shoal Media Inc.	Anguilla		100	%
Shoal Games (UK) Plc	United Kingdom		99	%
Shoal Media (UK) Ltd.	United Kingdom		100	%

In addition, there are the following dormant subsidiaries; Bingo.com (Antigua) Inc., Bingo.com (Wyoming) Inc., and Bingo Acquisition Corp.

During the quarter ended

March 31, 2019,

the Company acquired Kidoz Ltd. a company incorporated under the laws of Israel. (Note

)

All inter-company balances and transactions have been eliminated in the consolidated financial statements.

Use of Estimates, Policy [Policy Text Block]

(b) 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 the disclosure of contingent assets and liabilities at the date of the financial statements and recognized revenues and expenses for the reporting periods.

Significant areas requiring the use of estimates include the collectability of accounts receivable, stock-based compensation, the valuation of deferred tax assets, the valuation of the acquisition of Kidoz Ltd. and the estimated interest rate of

12%

for the right of use assets. Actual results

may

differ significantly from these estimates.

Revenue from Contract with Customer [Policy Text Block]

Ad tech advertising revenues is recognized when advertising is served and when collection of the amounts are reasonably assured.

The Company recognizes content revenue in accordance with general revenue recognition accounting guidance, when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collection is probable.

The content revenue includes sale of in-game and premium purchases, net of platform fees, in-game advertising, subscriptions. and revenue is recognized when delivery has occurred, and the collection of the amounts are reasonably assured.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

(d) Foreign currency:

The consolidated financial statements are presented in United States dollars, the functional currency of the Company and its subsidiaries. The Company accounts for foreign currency transactions and translation of foreign currency financial statements under Statement ASC

830,

Foreign Currency Matters. Transaction amounts denominated in foreign currencies are translated at exchange rates prevailing at the transaction dates. Carrying values of monetary assets and liabilities are adjusted at each balance sheet date to reflect the exchange rate at that date. Non-monetary assets and liabilities are translated at the exchange rate on the original transaction date.

Gains and losses from restatement of foreign currency monetary and non-monetary assets and liabilities are included in operations. Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in earnings.

Internal Use Software, Policy [Policy Text Block]

(e) Software Development Costs:

Software development costs incurred in the research and development of new software products and enhancements to existing software products for external use are expensed as incurred until technological feasibility has been established. After technological feasibility is established, any software development costs are capitalized and amortized at the greater of the straight-line basis over the estimated economic life of the related product or the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for the related product.

If a determination is made that capitalized amounts are

not

recoverable based on the estimated cash flows to be generated from the applicable software, any remaining capitalized amounts are written off. Although the Company believes that its approach to estimates and judgments as described herein is reasonable, actual results could differ and the Company

may

be exposed to increases or decreases in revenue that could be material.

Total software development costs were

$7,256,571

as at

June 30, 2019 (

December 31, 2018 -

$6,716,810

Property, Plant and Equipment, Policy [Policy Text Block]

(f) Equipment:

Equipment is recorded at cost less accumulated depreciation. Depreciation is provided for annually on the declining balance method over the following periods:

Equipment and computers			33.3%
Furniture and fixtures			20.0%
Leasehold improvement			Duration of the lease

Expenditures for maintenance and repairs are charged to expenses as incurred. Major improvements are capitalized. Gains and losses on disposition of equipment are included in operations as realized.

Share-based Payment Arrangement [Policy Text Block]

(g) Stock-based compensation:

The Company recognizes all stock-based compensation as an expense in the financial statements and that such cost be measured at the fair value of the award.

The fair value of each option grant has been estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

	2019		2018
Expected dividend yield		-		-
Expected stock price volatility		-		109	%
Weighted average volatility		-		96	%
Risk-free interest rate		-		1.97	%
Expected life of options (years)		-		5
Forfeiture rate		-		5	%

Lessee, Leases [Policy Text Block]

(h) Right of use assets:

The Company determines if an agreement is a lease at inception. The Company evaluates the lease terms to determine whether the lease will be accounted for as an operating or finance lease. Operating leases are included in operating lease right-of-use ("ROU") assets, operating lease liabilities, current portion, and operating lease liabilities, net of current portion in the consolidated balance sheets.

ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company leases do

not

provide an implicit rate, the

Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company's lease terms

may

include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

A lease that transfers substantially all of the benefits and risks incidental to ownership of property are accounted for as finance leases. At the inception of a finance lease, an asset and finance lease obligation is recorded at an amount equal to the lesser of the present value of the minimum lease payments and the property's fair market value. Finance lease obligations are classified as either current or long-term based on the due dates of future minimum lease payments, net of interest.

Business Combinations Policy [Policy Text Block]

(i) Business Combinations:

When the Company acquires a business, the purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated respective fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require the Company to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are

not

limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. The Company's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results

may

differ from estimates. During the measurement period, which is

one

year from the acquisition date, the Company

may

record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to non-operating income (expense) in the consolidated statements of operations.

New Accounting Pronouncements, Policy [Policy Text Block]

(j) New accounting pronouncements and changes in accounting policy:

June 2016,

the FASB issued ASU

No.

2016

13,

"Financial Instruments - Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments". The accounting standard changes the methodology for measuring credit losses on financial instruments and the timing when such losses are recorded. ASU

No.

2016

is effective for fiscal years, and interim periods within those years, beginning after

December 15, 2019.

Early adoption is permitted for fiscal years, and interim periods within those years, beginning after

December 15, 2018.

November 2018,

the FASB issued ASU

2018

19,

Codification Improvements to Topic

326,

Financial Instruments - Credit Losses ( "ASU

2018

19"

) . ASU

2018

clarifies that receivables arising from operating leases are

not

within the scope of Subtopic

326

20.

Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic

842,

Leases. In

April 2019,

the FASB issued ASU

2019

04,

Codification Improvements to Topic

326,

Financial Instruments - Credit Losses, Topic

815,

Derivatives and Hedging, and Topic

825,

Financial Instruments, which replaces the "incurred loss" impairment methodology with an approach based on "expected losses" to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. The Update also modified the accounting for available-for-sale ("AFS") debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic

326

30,

Financial Instruments-Credit Losses-Available-for-Sale Debt Securities . Credit losses relating to AFS debt securities will be recorded through an allowance for credit losses. The codification improvements in ASU

2019

clarify that an entity should include recoveries when estimating the allowance for credit losses. The amendments specify that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should

not

exceed the aggregate of amounts previously written off and expected to be written off by the entity. In addition, for collateral dependent financial assets, the amendments clarify that an allowance for credit losses that is added to the amortized cost basis of the financial asset(s) should

not

exceed amounts previously written off. The amendment also clarifies FASB's intent to include all reinsurance recoverables that are within the scope of Topic

944

to be within the scope of Subtopic

326

20,

regardless of the measurement basis of those recoverables. The Company is currently evaluating the impact of the amended guidance and has

not

yet determined the effect of the standard on its ongoing financial reporting.

January 2017,

the FASB issued ASU

2017

04,

Intangibles - Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment, which eliminates Step

from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should

not

exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable.

The amendments also eliminate the requirements for any reporting unit with a

zero

or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step

of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after

December 15, 2019.

Early adoption is permitted. ASU

2017

should be adopted on a prospective basis. The Company is in the process of evaluating the potential impact of this new ASU on our condensed consolidated financial statements.

August 2018,

the FASB issued ASU

No.

2018

13,

"Fair Value Measurement: Disclosure Framework (Topic

840

) - Changes to the Disclosure Requirements for Fair Value Measurement", which will improve the effectiveness of disclosure requirements for recurring and nonrecurring Level

Level

and Level

instruments in the fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

The Company is evaluating the impact this standard will have on the Company's consolidated financial statements.

August 2018,

the FASB issued ASU

No.

2018

15,

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires implementation costs in a hosting arrangement that is a service contract to be capitalized consistent with the rules in ASC

350

40,

Intangibles-Goodwill and Other-Internal-Use Software. This aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Costs incurred during the application development stage are to be capitalized and expensed according to their nature, while costs incurred during the preliminary project and post- implementation stages are to be expensed. This ASU also contains guidance with regard to the amortization period, impairment and presentation within the financial statements. The ASU is required to be adopted by the Company during

2020,

however early adoption is allowed in an interim period before then, and

may

be applied retrospectively or prospectively to applicable costs on the Company's condensed consolidated financial statements. The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt.

March 2019,

the FASB issued ASU

No.

2019

01,

Leases (Topic

842

) ("ASU

2019

01"

), Codification Improvements , which aligned the new leases guidance with existing guidance for fair value of the underlying asset by lessors that are

not

manufacturers or dealers. As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that

may

apply. However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in ASC

820,

Fair Value Measurement) should be applied. More importantly, the ASU also exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard. This standard is effective for fiscal years beginning after

December 15, 2019.

Early adoption is allowed. The Company is evaluating the impact this ASU will have on its consolidated financial statements.

There have been

other recent accounting standards, or changes in accounting standards, during the period ended

June 30, 2019,

as compared to the recent accounting standards described in the Annual Report, that are of material significance, or have potential material significance, to us.

Fair Value of Financial Instruments, Policy [Policy Text Block]

(k) Financial instruments:

(i) Fair values:

The fair value of accounts receivable, accounts payable, accrued liabilities, short term loan and accounts payable and accrued liabilities - related party approximate their financial statement carrying amounts due to the short-term maturities of these instruments. Cash is carried at fair value using a level

fair value measurement.

In general, fair values determined by Level

inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level

inputs utilize data points that are observable such as quoted prices, interest rates and yield curves.

Fair values determined by Level

inputs are unobservable data points for the asset or liability, and included situations where there is little, if any, market activity for the asset. The Company's cash was measured using Level

inputs. Stock-based compensation was measured using Level

inputs.

(ii) Foreign currency risk:

The Company operates internationally, which gives rise to the risk that cash flows

may

be adversely impacted by exchange rate fluctuations. The Company has

not

entered into any forward exchange contracts or other derivative instrument to hedge against foreign exchange risk.