2.
Significant accounting policies
Basis
of preparation, functional and presentation currency
The
condensed interim consolidated financial statements have been prepared in accordance with US GAAP applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in the normal course of business on the historical cost basis
except for certain financial instruments that are measured at fair value. Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
All
financial information is presented in US Dollars (“USD”) as the Company’s presentation currency and functional currency
is in Canadian Dollars (“CAD”). The interim financial statements are condensed and should be read in conjunction with the
Company’s latest annual year-end consolidated financial statements for the year ended August 31, 2024. It is management’s
opinion that all adjustments necessary for a fair statement of the results for the interim period has been made, and all adjustments
are of a recurring nature or a description of the nature of and any amount of any adjustments other than normal recurring nature has
been stated. Sufficient disclosures have been so as to not make the interim financial information misleading. There are no prior-period
adjustments in these condensed interim consolidated financial statements.
Operating
segments
The
Company determines its reporting units in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) 280, Segment Reporting. The Company evaluates a reporting unit by first identifying its operating segments
under ASC 280. The Company operates as one operating segment which is reported in a manner consistent with the internal reporting provided
to the chief operating decision-makers. The chief operating decision-makers are responsible for the allocation of resources and assessing
the performance of the operating segment and have been identified as the CEO and CFO of the Company.
Pineapple
Financial Inc.
Notes
to the Condensed Interim Consolidated Financial Statements for period ended May 31, 2025 - Unaudited
(Expressed
in US Dollars)
2.
Significant accounting policies (continued from previous page)
Basis
of consolidation
The
condensed interim consolidated financial statements include the accounts of the Company, and its wholly owned subsidiary, Pineapple Insurance
Inc and Pineapple National Inc. All transactions with the subsidiaries and any intercompany balances, gains or losses have been eliminated
upon consolidation. The subsidiaries have a USD presentation currency, and the functional currency is in CAD, and accounting policies
have been applied consistently to the subsidiaries.
Recently
issued and adopted accounting standards:
As
an “emerging growth company,” the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay
adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to
private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below
reflects this election.
| Recently Adopted |
|
| |
|
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In July 2023, the FASB
issued 2023-03 — Presentation of Financial Statements (Topic 205), Income Statement — Reporting Comprehensive Income
(Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation — Stock Compensation
(Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March
24, 2022, EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 — General Revision of Regulation
S-X: Income or Loss Applicable to Common Stock (SEC Update). The adoption of this standard on August 1, 2023, did not result in amended
disclosures in the Company’s consolidated financial statements, nor did this standard have a material impact the Company’s
results of operations. |
| |
|
| |
In March 2024, the FASB
issued ASU 2023-07 — Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The update enhances disclosures
by requiring entities to provide more detailed information about significant segment expenses, other segment items, and measures
of segment profit or loss used by the chief operating decision maker (CODM). The guidance also requires qualitative descriptions
of the methods used to determine segment profit/loss and asset measurement. The adoption of this standard did not have a material
impact on the Company’s consolidated financial statements but resulted in expanded disclosures within the segment reporting
footnotes. |
| |
|
| Not Yet Adopted |
|
| |
|
| |
In December 2023, the FASB
issued ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard modifies the rules on income
tax disclosures to require entities to disclose specific categories in the rate reconciliation, the income or loss from continuing
operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. ASU 2023-09 also requires
entities to disclose their income tax payments to international, federal, state, and local jurisdictions. The ASU is effective for
years beginning after December 15, 2024, but early adoption is permitted. This ASU should be applied on a prospective basis, although
retrospective application is permitted. The Company is currently evaluating the impact of this standard on its financial statements
and disclosures. |
| |
|
| |
In
March 2024, the FASB issued ASU 2024-01 - Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest
and Similar Awards. This standard clarifies whether profits interest and similar awards fall within the scope of stock-based
compensation guidance as defined in ASC Topic 718, introducing examples to demonstrate this. The ASU includes scenarios where
profits interest awards are classified as equity instruments or liability awards and situations where they fall outside ASC Topic
718, being accounted for under ASC Topic 710. The ASU is effective for years beginning after December 15, 2024, but early adoption
is permitted. This ASU should be applied on a prospective basis, although retrospective application is permitted. The Company
is currently evaluating the impact of this standard on its financial statements and disclosures.
In
November 2024, the FASB issued ASU 2024-03: Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure
(Subtopic 220-40) – Disaggregation of Income Statement Expenses. The new guidance requires companies to disclose information
about specific expenses at each interim and annual reporting period. The guidance is effective for fiscal years beginning after December
15, 2026 and interim periods with fiscal years beginning after December 15, 2027. The Company is in the process of evaluating the
requirements of the update, which may result in expanded disclosures upon adoption. |
Pineapple
Financial Inc.
Notes
to the Condensed Interim Consolidated Financial Statements for period ended May 31, 2025 - Unaudited
(Expressed
in US Dollars)
|