SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Sep. 30, 2017

Significant Accounting Policies

SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The financial statements presented herein reflect the consolidated financial position of Park City Group, Inc. and subsidiaries. All inter-company transactions and balances have been eliminated in consolidation.  

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that materially affect the amounts reported in the consolidated financial statements.  Actual results could differ from these estimates.  The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results it reports in its financial statements.  The Securities and Exchange Commission has defined the most critical accounting policies as those that are most important to the portrayal of the Company’s financial condition and results, and require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.  Based on this definition, the Company’s most critical accounting policies include:  income taxes, goodwill and other long-lived asset valuations, revenue recognition, stock-based compensation, and capitalization of software development costs.

Earnings Per Share

Basic net income per common share (“Basic EPS ”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share (“ Diluted EPS ”) reflects the potential dilution that could occur if stock options or other contracts to issue shares of common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share.

The following table presents the components of the computation of basic and diluted earnings per share for the periods indicated:

	Three Months Ended
	September 30,
	2017		2016
Numerator
Net income applicable to common shareholders	$	213,690	$	427,649
Denominator
Weighted average common shares outstanding, basic		19,424,000		19,266,000
Warrants to purchase common stock		914,000		833,000
Weighted average common shares outstanding, diluted		20,338,000		20,099,000
Net income per share
Basic	$	0.01	$	0.02
Diluted	$	0.01	$	0.02

Reclassifications

            Certain prior-year amounts have been reclassified to conform with the current year's presentation.