Company: CRCE
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001096906-25-001824
Chunk: 7

Company: Circle Energy, Inc./NV
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 7
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3) plus the lower of cost or estimated fair value of unproven properties included in the costs being amortized; 
 
4) less income tax effects related to differences between the book and tax basis of the properties. 
 
Land, Buildings, Equipment and Leasehold Improvements – Land, buildings, equipment and leasehold improvements are carried at historical cost, adjusted for impairment loss and accumulated depreciation.  Historical costs include all direct costs associated with the acquisition of land, buildings, equipment and leasehold improvements and placing them in service.
 
Depreciation of buildings equipment, software and leasehold improvements is calculated using the straight-line method based upon the following estimated useful lives:
 
Leasehold improvements
 
3-10 years

Office equipment and software
 
3-7 years

Equipment
 
5-10 years

Revenue Recognition – The Company accounts for revenues according to Accounting Standards Update (“ASU”) 2014-09 Revenues from Contracts with Customers (Topic 606) (“ASU 2014-09”).  The Company does not currently have any revenues. 

10

CIRCLE ENERGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Income Taxes – Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.  No provision has been made for income taxes as the Company has not recorded or received any revenues.
 
For the three and nine months ended September 30, 2025, the Company recorded a full valuation allowance against the deferred tax asset of $4,387 and $12,890, respectively.  For the three and nine months ended September 30, 2024, the Company recorded a full valuation allowance against the deferred tax asset of $3,207 and $10,788, respectively.  As the Company currently has no revenues there is reasonable doubt as to the realizability of this deferred tax asset.  With the allowance taken as of September 30, 2025, the