Under the full cost method, the Company undergoes a ceiling test to determine if there is an impairment to its proved properties. The impairment amount is the excess of capitalized costs over the present value, discounted at 10, of the estimated future net cash flows from the proven oil and gas reserves plus the cost, or estimated fair market value. Brinx Resources Ltd. did not have an impairment cost for the years ended October 31, 2011 and 2010, respectively.