Organization, Business Operations and Summary of Significant Accounting Policies Organization and Business Operations	12 Months Ended
Mar. 31, 2012
Notes to Financial Statements
Organization, Business Operations and Summary of Significant Accounting Policies Organization and Business Operations	Note 1 Organization, Business Operations and Summary of Significant Accounting Policies Organization and Business Operations American First Financial, Inc. (“AFF”) is a Florida corporation formed in March, 2001. AFF is a specialty mortgage origination firm that deals in wholesale lending. Wholesale lending is the taking of retail mortgage loan originations from mortgage brokers and getting them closed and funded for them, as opposed to dealing directly with the retail customer. AFF’S operations were primarily the acceptance of loan submissions from independent retail mortgage brokers and then presenting those loans to approved wholesale lenders. AFF only acts as a broker agent. As a broker agent, AFF does not assume any risk on its loans and receives a small fee based on the loan volume for each loan it places. The lenders that accept the loans have no recourse against AFF. Subsequent to December 31, 2011, the Company chose to stop brokering loans for un-affiliated agencies. This service will be reserved for agencies interested in joining AFF through acquisition or investment. The Company is offering consulting services to un-affiliated mortgage brokers to help those agencies package and place loans. Some exceptions to the brokering policy may occur. We have operated in several states but primarily present loans from the Florida market. We have one office in Largo Florida. Summary of Significant Accounting Policies *Basis of Presentation* The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of the financial position at March 31, 2012 and 2011, the result of operations and cash flows for the years then ended have been made. *Use of Estimates* The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. *Financial Instruments* The Company’s balance sheets include the following financial instruments: cash, loans from shareholders, accounts payable, accrued expenses and note payable to stockholder. The carrying amounts of current assets and current liabilities approximate their fair value due to the relatively short period of time between the origination of these instruments and their expected realization. The carrying values of the note payable to stockholder approximates fair value based on borrowing rates currently available to the Company for instruments with similar terms and remaining maturities. *Fair Value Measurement* All financial and nonfinancial assets and liabilities were recognized or disclosed at fair value in the financial statements. This value was evaluated on a recurring basis (at least annually). Generally accepted accounting principles in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on a measurement date. The accounting principles also established a fair value hierarchy which required an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs were used to measure fair value. Level 1: Quotes market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that were corroborated by market data. Level 3: Unobservable inputs that were not corroborated by market data. *Cash and Cash Equivalents* The majority of cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of six months or less to be cash equivalents. *Revenue Recognition* AFF receives origination fees for the origination of loans and recognizes these when the earnings process has been completed and documented through filings with local governmental agencies, generally at closing. Some loan fees are received in the form of a discount or premium on loans sold; these are recognized as origination income when received. AFF also receives consulting fees from independent mortgage brokers for helping to package and present non-conforming and sub-prime loans to willing lenders. Our fees are negotiated in advance with the independent brokers and are recorded when the broker successfully submits a packaged loan to a lender. *Mortgages, Loan Loss Reserves and Capitalization* AFF does not hold mortgages for investment and thereby does not calculate loan loss reserves and is not subject to any minimum capital requirements by the State or any regulatory agency. AFF utilizes the licenses of Global Lending Group, a related party, for closing and funding any loans that need funding until their sale. These loans are the property of Global Lending Group at closing and as such, are not reflected on the financial statements of AFF. *Real Estate Owned* The Company currently owns no real estate. At March 31, 2009 the Company held an investment property that was sold in July 2009. The property was always marketed for sale, as our intentions were not long-term in nature. Due to market conditions, we were forced to hold for a longer period; however the property was always actively listed with a local real estate agency. We no longer hold any property for investment and do not have any recourse to any mortgage loans, nor do we intend to have any recourse of future loans. Periodically and at the time of the March 31, 2009 audited financial statements, we had a current appraisal of the holding value, based on the local real estate market. The property was originally valued at our acquired cost, which was below the current market value; however, we did not receive any offers through 2007, whereby we did impair the property value by approximately 10%. At the time we believed that the valuation was accurate and relied upon the local real estate valuations given by local real estate agents. The subsequent sale was less than the carrying value, however, we believe that we accepted a below market offer for the purpose of cash flow and were not confident that the market would not deteriorate further, so the cash offer was accepted. *Mortgage Servicing* The company currently does no mortgage or loan servicing and does not intend to in the near future. *Property and equipment* Property and Equipment is stated at cost. Depreciation is computed by the straight-line method over estimated useful lives. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of property and equipment exists at March 31, 2012 and 2011. *Investment in Property and Other Long-Lived Assets* Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. The Company did not recognize any impairment losses for any periods presented. *Stock Options* The Company recognizes all share-based payments to employees, including grants of employee stock options to be recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). *Advertising* The costs of advertising are expensed as incurred. Advertising expenses were $0 and $150 for the years ended March 31, 2012 and 2011, respectively. Advertising expenses are included in the Company’s selling operating expenses. *Income Taxes* The Company accounts for income taxes using the liability method. As such, deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. *Earnings (Loss) Per Share* Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares. As of March 31, 2012 and 2011, there were 2,300,000 options outstanding that were considered anti-dilutive. *Recently Issued Accounting Pronouncements* We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

Organization, Business Operations and Summary of Significant Accounting Policies Organization and Business Operations

12 Months Ended

Mar. 31, 2012

Organization, Business Operations and Summary of Significant Accounting Policies Organization and Business Operations

Note 1 Organization, Business Operations and Summary of Significant Accounting Policies Organization and Business Operations

American First Financial, Inc. (“AFF”) is a Florida corporation formed in March, 2001. AFF is a specialty mortgage origination firm that deals in wholesale lending. Wholesale lending is the taking of retail mortgage loan originations from mortgage brokers and getting them closed and funded for them, as opposed to dealing directly with the retail customer. AFF’S operations were primarily the acceptance of loan submissions from independent retail mortgage brokers and then presenting those loans to approved wholesale lenders. AFF only acts as a broker agent. As a broker agent, AFF does not assume any risk on its loans and receives a small fee based on the loan volume for each loan it places. The lenders that accept the loans have no recourse against AFF.

Subsequent to December 31, 2011, the Company chose to stop brokering loans for un-affiliated agencies. This service will be reserved for agencies interested in joining AFF through acquisition or investment. The Company is offering consulting services to un-affiliated mortgage brokers to help those agencies package and place loans. Some exceptions to the brokering policy may occur.

We have operated in several states but primarily present loans from the Florida market. We have one office in Largo Florida.

Summary of Significant Accounting Policies

Basis of Presentation

The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of the financial position at March 31, 2012 and 2011, the result of operations and cash flows for the years then ended have been made.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Financial Instruments

The Company’s balance sheets include the following financial instruments: cash, loans from shareholders, accounts payable, accrued expenses and note payable to stockholder. The carrying amounts of current assets and current liabilities approximate their fair value due to the relatively short period of time between the origination of these instruments and their expected realization. The carrying values of the note payable to stockholder approximates fair value based on borrowing rates currently available to the Company for instruments with similar terms and remaining maturities.

Fair Value Measurement

All financial and nonfinancial assets and liabilities were recognized or disclosed at fair value in the financial statements. This value was evaluated on a recurring basis (at least annually). Generally accepted accounting principles in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on a measurement date. The accounting principles also established a fair value hierarchy which required an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs were used to measure fair value.

Level 1: Quotes market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that were corroborated by market data.

Level 3: Unobservable inputs that were not corroborated by market data.

Cash and Cash Equivalents

The majority of cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of six months or less to be cash equivalents.

Revenue Recognition

AFF receives origination fees for the origination of loans and recognizes these when the earnings process has been completed and documented through filings with local governmental agencies, generally at closing. Some loan fees are received in the form of a discount or premium on loans sold; these are recognized as origination income when received.

AFF also receives consulting fees from independent mortgage brokers for helping to package and present non-conforming and sub-prime loans to willing lenders. Our fees are negotiated in advance with the independent brokers and are recorded when the broker successfully submits a packaged loan to a lender.

Mortgages, Loan Loss Reserves and Capitalization

AFF does not hold mortgages for investment and thereby does not calculate loan loss reserves and is not subject to any minimum capital requirements by the State or any regulatory agency. AFF utilizes the licenses of Global Lending Group, a related party, for closing and funding any loans that need funding until their sale. These loans are the property of Global Lending Group at closing and as such, are not reflected on the financial statements of AFF.

Real Estate Owned

The Company currently owns no real estate.

At March 31, 2009 the Company held an investment property that was sold in July 2009. The property was always marketed for sale, as our intentions were not long-term in nature. Due to market conditions, we were forced to hold for a longer period; however the property was always actively listed with a local real estate agency. We no longer hold any property for investment and do not have any recourse to any mortgage loans, nor do we intend to have any recourse of future loans.

Periodically and at the time of the March 31, 2009 audited financial statements, we had a current appraisal of the holding value, based on the local real estate market. The property was originally valued at our acquired cost, which was below the current market value; however, we did not receive any offers through 2007, whereby we did impair the property value by approximately 10%. At the time we believed that the valuation was accurate and relied upon the local real estate valuations given by local real estate agents. The subsequent sale was less than the carrying value, however, we believe that we accepted a below market offer for the purpose of cash flow and were not confident that the market would not deteriorate further, so the cash offer was accepted.

Mortgage Servicing

The company currently does no mortgage or loan servicing and does not intend to in the near future.

Property and equipment

Property and Equipment is stated at cost. Depreciation is computed by the straight-line method over estimated useful lives. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of property and equipment exists at March 31, 2012 and 2011.

Investment in Property and Other Long-Lived Assets

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. The Company did not recognize any impairment losses for any periods presented.

Stock Options

The Company recognizes all share-based payments to employees, including grants of employee stock options to be recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

Advertising

The costs of advertising are expensed as incurred. Advertising expenses were $0 and $150 for the years ended March 31, 2012 and 2011, respectively. Advertising expenses are included in the Company’s selling operating expenses.

Income Taxes

The Company accounts for income taxes using the liability method. As such, deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

Earnings (Loss) Per Share

Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares. As of March 31, 2012 and 2011, there were 2,300,000 options outstanding that were considered anti-dilutive.

Recently Issued Accounting Pronouncements

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

AMERICAN FIRST FINANCIAL INC 10-K