Annual report pursuant to Section 13 and 15(d)

DISCONTINUED OPERATIONS

v2.4.0.6
DISCONTINUED OPERATIONS
12 Months Ended
Sep. 30, 2011
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
NOTE 4 —
DISCONTINUED OPERATIONS
 
On November 12, 2009, Datacenter Contractors AG (“DC”, formerly known as “Beacon Solutions AG”), a wholly owned subsidiary of BESG Ireland Ltd., entered into a two-phase project management services agreement for the design and construction of a data center in Zurich, Switzerland.  DC’s operations principally consisted of services provided to one significant customer under a specific contract and were previously reported in the Company’s European operating segment.  Phase 1 of the agreement was completed in June 2010.  Phase 2 of the agreement relates to the completion of the data center and was valued to the Company at approximately $10,000 in net sales.
 
In June 2010, the customer notified the Company that it was terminating the agreement and cancelling Phase 2 due to a claimed breach.  The Company and customer entered into negotiations regarding the possible continuation of the agreement which did not materialize.  On December 14, 2010, Beacon announced that, as a result of DC’s inability to reach a settlement of unpaid invoices by its largest debtor, the DC Board has filed the relevant statutory notices with the local judge in Switzerland in accordance with its fiduciary obligations under Swiss law.  As a result of this action, Beacon ceases to have a controlling financial interest in DC and therefore, in accordance with ASC 810-10-65, must deconsolidate the subsidiary from the consolidated financial statements for the year ended September 30, 2011.  The resultant deconsolidation generated a net income of $7,892, for the ended September 30, 2011 which is mainly composed of the elimination of the net liabilities of the discontinued DC operations from Beacon’s operations.
 
The assets and liabilities of DC have been classified on the consolidated balance sheets as current assets and liabilities of discontinued operations.  The assets and liabilities comprising the balances, as classified in our consolidated balance sheets, consist of:
 
    
As of
 
   
September 30,
 
   
2010
 
ASSETS
     
Cash
  $ 46  
Accounts receviable
    87  
Total assets
  $ 133  
LIABILITIES
       
Accounts payable
  $ 7,554  
Accrued expenses
    1,004  
Total liabilities
  $ 8,558  
 
The following table presents the results of the discontinued operations.
 
   
   
For the Year
 
   
Ended
 
   
September 30,
 
   
2010
 
       
Net Sales
  $ 16,948  
         
Net loss before taxes
    (8,181 )
Income taxes
    -  
Net loss from discontinued operations
  $ (8,181 )
 
As part of the discontinued operations, goodwill and intangible assets recorded as a result of the acquisition of Symbiotec Solutions AG were deemed impaired and therefore written off as of September 30, 2010 in the amount of $254 and $396, respectively
 
We accounted for the filing under the guidance of ASU No. 2010-02, “Accounting and Reporting for Decreases in Ownership of a Subsidiary - a Scope Clarification” which requires an entity to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary.