Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of estimates

The preparation of the Company’s consolidated financial statements in conformity with 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, as well as the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Significant estimates include the assessment of collectability of revenue recognized, and the valuation of amounts receivable, inventory, investments, assets acquired, deferred income tax assets, goodwill and intangible assets, liabilities, and stock-based compensation. These estimates have the potential to significantly impact our consolidated financial statements, either because of the significance of the financial statement item to which they relate, or because they require judgment and estimation due to the uncertainty involved in measuring, at a specific point in time, events that are continuous in nature.

Asset Liquidation Accounting [Policy Text Block]

Asset liquidation accounting

Counsel RB’s asset liquidation transactions are generally conducted through two different formats. GAAP requires that they be reported separately in the consolidated financial statements.

Revenue from transactions that Counsel RB conducts directly is reported as Asset Liquidation revenue, and the associated direct costs are reported as Asset Liquidation costs. At the balance sheet date, any unsold assets are reported as Inventory, any outstanding accounts receivable are included in the Company’s Amounts Receivable, and any associated liabilities are included in the Company’s Accrued Liabilities. Although all inventory is expected to be sold in less than one year, real estate inventory is not recorded as a current asset.

Transactions that involve Counsel RB acting jointly with one or more additional purchasers, pursuant to a partnership, joint venture or limited liability company (“LLC”) agreement (collectively, “Joint Ventures”), require that Counsel RB’s proportionate share of the net income (loss) be reported as Earnings (Loss) of Equity Accounted Asset Liquidation Investments. At each balance sheet date, the Company’s investments in these Joint Ventures are reported in the consolidated balance sheet as Asset Liquidation Investments. Although Counsel RB expects to exit each of its investments in Joint Ventures in less than one year, they are reported on the balance sheet as non-current Asset Liquidation Investments. The Company monitors the value of the Joint Ventures’ underlying assets and liabilities, and records a write down of its investments if the Company concludes that there has been a decline in the value of the net assets.

Neither Equity Partners nor Heritage Global Partners participate in Joint Ventures; they primarily earn revenue from fee-based services.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains its cash and cash equivalents with financial institutions in Toronto, Canada; New York, NY and San Diego, CA. These accounts may from time to time exceed federally insured limits. The Company has not experienced any losses on such accounts.

Receivables, Policy [Policy Text Block]

Amounts receivable

The Company’s amounts receivable are primarily related to the operations of its subsidiaries Counsel RB, Equity Partners, and Heritage Global Partners. They consist of three major categories: receivables from Joint Venture partners, receivables from asset sales, and fees and retainers relating to the businesses of Equity Partners and Heritage Global Partners. The initial value of an amount receivable corresponds to the fair value of the underlying goods or services. To date all receivables have been classified as current and, due to their short-term nature, any decline in fair value would be due to issues involving collectability. At each financial statement date the collectability of each outstanding amount receivable is evaluated, and an allowance is recorded if the book value exceeds the amount that is deemed collectable. Collectability is determined on the basis of payment history. See Note 6 for more detail regarding the Company’s amounts receivable.

Inventory, Policy [Policy Text Block]

Inventory

The Company’s inventory consists of assets acquired for resale by Counsel RB and Heritage Global Partners, which are normally expected to be sold within a one-year operating cycle. They are recorded at the lower of cost and net realizable value. During 2012 the Company recorded write downs of $363 on its real estate inventory and $210 on its equipment inventory, both of which were reported as part of Other Expenses. There were no write downs during 2011.

Equity and Cost Method Investments, Policy [Policy Text Block]

Investments

At December 31, 2012 and 2011 the Company held two investments in private companies, both of which were accounted for under the equity method. Under this method, the investments are carried at cost, plus or minus the Company’s share of increases and decreases, respectively, in the investee’s net assets and certain other adjustments. Impairments, equity pick-ups, and realized gains and losses on equity securities are reported separately in the consolidated statement of operations. The Company monitors its investments for impairment by considering factors such as the economic environment and market conditions, as well as the operational performance of, and other specific factors relating to, the businesses underlying the investments. The fair values of the securities are estimated quarterly using the best available information as of the evaluation date, such as recent financing rounds of the investee, and other investee-specific information. See Note 5 for further discussion of the Company’s investments.

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

Fair value of financial instruments

The fair value of financial instruments is the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. At December 31, 2012 and 2011, the carrying values of the Company’s cash, amounts receivable, related party receivable, deposits, accounts payable, accrued liabilities and third party debt approximate fair value. There are three levels within the fair value hierarchy: Level 1 – quoted prices in active markets for identical assets or liabilities; Level 2 – significant other observable inputs; and Level 3 – significant unobservable inputs. The fair value hierarchy does not apply to the financial instruments noted above, with the exception of cash. The Company considers the fair value of cash to be Level 2 within the hierarchy.

Although the Company does not employ fair value accounting for any of its assets or liabilities, in assessing the fair values of its financial instruments, the Company applies the Level 1, 2 and 3 valuation principles required by GAAP.

Assets and Liabilities Acquired [Policy Text Block]

Assets and liabilities acquired

In the course of its operations, most recently with respect to the Heritage Global Partners acquisition in February 2012, the Company acquires assets and liabilities as components of a business combination. Valuations are assigned to the acquired assets and liabilities based primarily on management’s assessment of their fair market value. With respect to the acquisition of Heritage Global Partners, the Company engaged the services of an independent third party to determine the value of the acquired intangible assets and goodwill.

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

Intangible assets

Intangible assets are recorded at fair value upon acquisition and are amortized over their estimated lives. The Company monitors events and changes in circumstances which require an assessment of recoverability. If the carrying amount of the intangible assets is not recoverable, an impairment loss is recognized in the statement of operations, determined by comparing the carrying amount of the asset to its fair value.

At December 31, 2012 the Company’s intangible assets relate to its acquisition of Heritage Global Partners in February 2012. See Note 2 and Note 6 for more detail regarding the Company’s intangible assets.

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

Goodwill

Goodwill, which results from the difference between the purchase price and the fair value of net identifiable assets acquired, is not amortized but is tested annually at December 31 for impairment in accordance with GAAP. Testing is a two-step process, in which the carrying amount of the reporting unit associated with the goodwill is first compared to the reporting unit’s estimated fair value. If the carrying amount of the reporting unit exceeds its estimated fair value, the fair values of the reporting unit’s assets and liabilities are analyzed to determine whether the goodwill of the reporting unit has been impaired. An impairment loss is recognized to the extent that the Company’s recorded goodwill exceeds its implied fair value as determined by this two-step process. FASB Accounting Standards Update 2011-08, Testing Goodwill for Impairment, provides the option to perform a qualitative assessment prior to performing the two-step process, which may eliminate the need for further testing. Goodwill, in addition to being tested for impairment annually, is tested for impairment between annual tests if an event occurs or circumstances change such that it is more likely than not that the carrying amount of goodwill may be impaired.

At December 31, 2012 the Company’s goodwill relates to its acquisition of Equity Partners in June 2011 and its acquisition of Heritage Global Partners in February 2012. See Note 2 and Note 6 for more detail regarding the Company’s goodwill.

Income Tax, Policy [Policy Text Block]

Deferred income tax assets

The Company recognizes deferred tax assets and liabilities for temporary differences between the tax bases of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted tax rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company periodically assesses the value of its deferred tax assets, which have been generated by a history of net operating and net capital losses, and determines the necessity for a valuation allowance. The Company evaluates which portion of the deferred tax assets, if any, will more likely than not be realized by offsetting future taxable income, taking into consideration any limitations that may exist on its use of its net operating and net capital loss carryforwards. See Note 10 for further discussion of the Company’s income taxes.

Commitments and Contingencies, Policy [Policy Text Block]

Liabilities and contingencies

The Company is involved from time to time in various legal matters arising out of its operations in the normal course of business. On a case by case basis, the Company evaluates the likelihood of possible outcomes for this litigation. Based on this evaluation, the Company determines whether a liability accrual is appropriate. If the likelihood of a negative outcome is probable, and the amount is estimable, the Company accounts for the liability in the current period.

Asset Liquidation Revenue [Policy Text Block]

Asset liquidation revenue

Asset liquidation revenue generally consists of gross proceeds from auctions and negotiated sales of asset inventory, and commissions and fees from acting as the agent for asset sales by third parties. Revenue is recognized when persuasive evidence of an arrangement exists, the amount of the proceeds is fixed, delivery terms are arranged and collectability is reasonably assured.

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

Stock-based compensation

The Company’s stock-based compensation is primarily in the form of options to purchase common shares. The fair value is calculated using the Black-Scholes Option Pricing Model, and subsequently expensed over the vesting period. The provisions of the Company’s stock-based compensation plans do not require the Company to settle any options by transferring cash or other assets, and therefore the Company classifies the option awards as equity. See Note 14 for further discussion of the Company’s stock-based compensation.

Segment Reporting, Policy [Policy Text Block]

Segment reporting

Since the second quarter of 2009, the Company has operated in two business segments, Asset Liquidation and Patent Licensing. The asset liquidation segment includes the operations of Counsel RB, Equity Partners and Heritage Global Partners. The patent licensing segment includes all operations relating to licensing of the Company’s intellectual property. See Note 15 for further discussion of the Company’s segments.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting pronouncements

In May 2011, the FASB issued Accounting Standards Update 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 results from joint efforts by the FASB and the International Accounting Standards Board (“IASB”) to develop converged guidance on how to measure fair value and what disclosures to provide about fair value measurements. Although ASU 2011-04 is largely consistent with the existing US GAAP fair value measurement principles, it expands existing disclosure requirements and makes other amendments. ASU 2011-04 became effective for interim or annual reporting periods beginning after December 15, 2011, with early adoption not permitted. The Company adopted ASU 2011-04 in the first quarter of 2012; its adoption did not have a material effect on the Company’s consolidated financial statements.

In December 2011, the FASB issued Accounting Standards Update 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU 2011-12”). ASU 2011-12 defers certain provisions of ASU 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income (“OCI”). Both ASU 2011-05 and 2011-12 became effective for interim or annual reporting periods beginning after December 15, 2011, with early adoption permitted. The guidance must be applied retrospectively for all periods presented in the financial statements. The Company adopted ASU 2011-05 and ASU 2011-12 in the first quarter of 2012. However, because the Company recorded OCI for the first time in the fourth quarter of 2012, the adoptions had minimal effect on the Company’s consolidated financial statements.

Future Accounting Pronouncements [Policy Text Block]

Future accounting pronouncements

In July 2012, the FASB issued Accounting Standards Update 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (“ASU 2012-02”). ASU 2012-02 amends the indefinite-lived intangible asset impairment testing guidance in ASC 350-30, by providing the option to perform a qualitative assessment before calculating the fair value of the asset. If it is determined, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is not more likely than not (i.e., a likelihood of more than 50 percent) impaired, a reporting entity would not need to calculate the fair value of the asset. ASU 2012-02 does not change the requirement to test indefinite-lived intangible assets annually for impairment, or to test for impairment between annual tests if warranted by events or circumstances. However, it does revise the examples of events and circumstances that should be considered. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company will formally adopt ASU 2012-02 in the first quarter of 2013, but based on management’s assessment, the adoption will not have a significant impact on its consolidated financial statements.