Company: DSNY
Filing Date: 2025-11-24
Form Type: 10-K
Source: 0001062993-25-016994
Chunk: 15

Company: DESTINY MEDIA TECHNOLOGIES INC
Filing Date: 2025-11-24
Form: 10-K
Item: Item 1A
Chunk 15
---
 procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Capitalization of Payroll Expenses to Intangible Assets

As described in Note 2 to the consolidated financial statements, the Company capitalizes direct costs related to application development activities that are probable to result in additional functionality. Capitalization is limited to costs that are directly attributable to the specific software application development stage. As more fully described in Note 4 to the consolidated financial statements, payroll expenses of $306,052 were capitalized to software under development in intangible assets.

The principal considerations for our determination that capitalization of payroll expenses to intangible assets is a critical audit matter are that there were judgments made by management when assessing whether the payroll expenses incurred for software application activities were eligible for capitalization. This in turn led to a high degree of auditor judgement, subjectivity, and effort in performing procedures to evaluate management's judgements in assessing the accounting for the capitalization of payroll expenses to intangible assets.

                20

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statement. Our audit procedures included, among others:

                Discussed, reviewed and obtained support on how management allocates payroll expenses to software under development.
                Discussed with management regarding the plans and intent for the software under development and computer software.
                Reviewed, discussed and obtained support for the reallocation of software under development to computer software.
                Recalculated amortization of the computer software to ensure amounts recorded were appropriate and in line with the accounting policy.
                Assessed impairment indicators of intangible assets and computer software.

We have served as the Company's auditor since 2025.

/s/ DAVIDSON & COMPANY LLP

Chartered Professional Accountants

                        Vancouver, Canada

November 24, 2025

                21

DESTINY MEDIA TECHNOLOGIES, INC.

Consolidated Balance Sheets 

                    Notes
                     
                    August 31, 2025

                    August 31, 2024 

                    ASSETS

                    Cash and cash equivalents
                     
                    $
                    1,117,889
                     
                    $
                    1,481,582

                    Accounts receivable, net of allowance