| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and consolidation The accompanying consolidated financial statements of the Group have been prepared in accordance with generally accepted accounting principles in the United States of America. On June 29, 2010, the Financial Accounting Standards Board (FASB) established the FASB Accounting Standards Codification (Codification) as the single source of authoritative US generally accepted accounting principles (GAAP) for all non-governmental entities Rules and interpretive releases of the Securities and Exchange Commission (SEC) and also sources of authoritative US GAAP for SEC registrants. The Codification does not change US GAAP but takes previously issued FASB standards and other U.S. GAAP authoritative pronouncements, changes the way the standards are referred to, and includes them in specific topic arrears. The adoption of the Codification did not have any impact on the GroupÂ’s financial statements. The consolidated financial statements are presented in US Dollars and include the accounts of the Group and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. The following table depicts the identity of the subsidiaries:
Name of Subsidiary Place of Incorporation Attributable Equity Interest % Registered Capital Green Standard Technologies Enterprise, Inc. (1) Nevada 100 USD 100 Syndicore Asia Limited (2) Hong Kong 100 HKD 1 Z-Line International E-Commerce Limited (3) Hong Kong 55 HKD 8,000,000 Hunan Syndicore Asia Limited PRC 100 HKD 10,000,000 Note: (1) Wholly owned subsidiary of ZZLL, discontinuous as at Dec 29, 2017 (2) Wholly owned subsidiary of ZZLL (3) With effective from October 8, 2019, Wholly owned subsidiary of Syndicore Asia Limited instead of 55% owned. (4) Wholly owned subsidiary of Syndicore Asia Limited The results of subsidiaries acquired or disposed of during the years are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal. Use of estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, deferred income taxes and the estimation on useful lives of plant and equipment. Actual results could differ from those estimates. Concentrations of credit risk Financial instruments that potentially subject the Group to significant concentrations of credit risk consist principally of accounts receivable. In respect of accounts receivable, the Group extends credit based on an evaluation of the customerÂ’s financial condition, generally without requiring collateral or other security. In order to minimize the credit risk, the management of the Group has delegated a team responsibility for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. Further, the Group reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Group consider that the GroupÂ’s credit risk is significantly reduced. Cash and cash equivalents Cash and cash equivalents include all cash, deposits in banks and other highly liquid investments with initial maturities of three months or less. Accounts receivable Accounts receivable are stated at original amount less allowance made for doubtful receivables, if any, based on a review of all outstanding amounts at the year end. An allowance is also made when there is objective evidence that the Group will not be able to collect all amounts due according to original terms of receivables. Bad debts are written off when identified. The Group extends unsecured credit to customers in the normal course of business and believes all accounts receivable in excess of the allowances for doubtful receivables to be fully collectible. The Group does not accrue interest on trade accounts receivable. The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis credit evaluations are preferred on all customers requiring credit over a certain amount. The Group had experienced the bad debts of $nil and $nil during the year ended December 31, 2019 and 2018 respectively. Plant and equipment Plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Depreciation of plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates: Furniture and fixtures 20% - 50% Office equipment 20% Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated.
Revenue recognition The Group recognizes revenue when it is earned and realizable based on the following criteria: persuasive evidence that an arrangement exists, services have been rendered, the price is fixed or determinable and collectability is reasonably assured. The Group also evaluates the presentation of revenue on a gross versus a net basis through application of Emerging Issues Task Force No. (“EITF”) 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent (i)Rental income is recognised on a time proportion basis over the lease terms. (ii)Interest income is recongised on time proportion basis. Advertising expenses Advertising expenses are charged to expense as incurred. The advertising expenses incurred for the year ended December 31, 2019 and 2018 were $Nil and $Nil respectively. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The FASB issued Accounting Standard Codification Topic 740 (ASC 740) “Income Taxes”. ASC 740 clarifies the accounting for uncertainty in tax positions. This requires that an entity recognized in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. The adoption of ASC 740 did not have any impact on the Group’s results of operations or financial condition for the year ended 31 December, 2019. As of the date of the adoption of ASC 740, the Group has no material unrecognized tax benefit which would favorably affect the effective income tax rate in future periods. The Group has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of operations. Comprehensive income Other comprehensive income refers to revenues, expenses, gains and losses that under U.S. GAAP are included in comprehensive income but are excluded from net income as these amounts are recorded as a component of stockholders’ equity. The Group’s other comprehensive income represented foreign currency translation adjustments. Foreign currency translation The functional currency of the Group is Hong Kong dollars (“HK$”). The Group maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. In 2015, the exchange rate being use to translate amount in HK$ is fixed at 7.8 to 1 for the purpose of preparing the consolidated financial statements which is derived from October 17, 1983 monetary policy from Hong Kong Monetary Authority where the Hong Kong dollar was pegged at a rate of 7.8 HK$ = 1 US$, through the currency board system with a limited floating range from 7.85 to 7.75. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. For financial reporting purposes, the financial statements of the Group which are prepared using the functional currency have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity. Year ended Year ended Dec 31, 2019 Dec 31, 2018 Year ended HK$ : US$ exchange rate 7.8 7.8 Average yearly HK$ : US$ exchange rate 7.8 7.8 Year ended RMB : US$ exchange rate 6.96379 6.85052 Average yearly RMB : US$ exchange rate 6.90608 6.72356 Fair value of financial instruments The carrying values of the Group’s financial instruments, including cash and cash equivalents, trade and other receivables, deposits, trade and other payables approximate their fair values due to the short-term maturity of such instruments. The carrying amounts of borrowings approximate their fair values because the applicable interest rates approximate current market rates. Stock-based Compensation Share-based compensation including stock options and common stock awards issued to employees and directors for services and are accounted for in accordance with FASB ASC 718 "Compensation - Stock Compensation" and share-based compensation including warrants and common stock awards issued to consultants and nonemployees are accounted for in accordance with FASB ASC 505-50 "Equity-Based Payment to Non-employees. All grant of common stock awards and stock options/warrants to employees and directors are recognized in the financial statements based on their grant date fair values. Awards to consultants and nonemployees are recognized based upon their fair value as of the earlier of a commitment date or completion of services. The grant date(s) of all awards are determined under the guidance of ASC 718-10-25-5. The Company estimates fair value of common stock awards based the quoted price of the Company's common stock on the grant date. The fair value of stock options and warrants is determined using the appropriate option pricing model depends on the applicable of situation. Basic and diluted earnings per share The Group computes earnings per share (“EPS’) in accordance with FASB Accounting Standard Codification Topic 260 (ASC 260) “Earnings Per Share”, and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. The calculation of diluted weighted average common shares outstanding for the year ended December 31, 2019 is based on the estimate fair value of the Group’s common stock during such periods applied to options using the treasury stock method to determine if they are dilutive. Effective on October 5, 2017, each of fifty (50) shares of the Company’s Common Stock, par value $.0001 per share, issued and outstanding immediately prior to the Effective Time (the “Old Common Stock”) shall automatically and without any action on the part of the holder thereof, be reclassified as and changed, pursuant, into one (1) share of the Company’s outstanding Common Stock (the “New Common Stock”). The following tables are a reconciliation of the weighted average shares used in the computation of basic and diluted earnings per share for the periods presented: For the Year ended December 31, 2019 2018 Numerator for basic and diluted earnings per share: $ $ Net (loss)/income 452,600 (120,806) Denominator: Basic weighted average shares 20,277,448 20,116,352 Effect of dilutive securities - Diluted weighted average shares 20,277,448 20,116,352 Basic earnings per share: 2.23 cents (0.60 cents) Diluted earnings per share: 2.23 cents (0.60 cents) No dilution effect due to net loss for the years ended December 31, 2019 and 2018. Related parties transactions A related party is generally defined as (i) any person that holds 10% or more of the Group’s securities and their immediate families, (ii) the Group’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Group, or (iv) anyone who can significantly influence the financial and operating decisions of the Group. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Recently issued accounting pronouncements FASB Simplifies Adoption of New Leases Standard for Certain Land Easements. The FASB has issued Accounting Standards Update (ASU) No. 2018-01, Leases (Topic 842):Land Easement Practical Expedient for Transition to Topic 842, ASU 2018-01 is expected to reduce the cost of adopting the new leases standard for certain land easements. It is also an attempt to help ensure that companies can make a successful transition to the standard without compromising the quality of information provided to investors about these transactions. Land easements (also commonly referred to as rights of way) represent the right to use, access, or cross another entity’s land for a specified purpose. Land easements are used by utility and telecommunications companies, for example, when they need to take a small strip of land, or easement, to bury wires. Not all companies have historically accounted for them as leases. Stakeholders pointed out that the requirement to evaluate all old and existing land easements, sometimes numbering in the tens of thousands, to determine if they meet the definition of a lease under the new standard could be very costly. They also noted there would be limited benefit to applying this requirement, as many of their land easements would not meet the definition of a lease, or even if they met that definition, many of their easements are prepaid and, therefore, already are recognized on the balance sheet. The land easements ASU addresses this by: · Providing an optional transition practical expedient that, if elected, would not require an organization to reconsider their accounting for existing land easements that are not currently accounted for under the old leases standard; and · Clarifying that new or modified land easements should be evaluated under the new leases standard, once an entity has adopted the new standard. The FASB issued an Accounting Standards Update (ASU) that helps organizations address certain stranded income tax effects in accumulated other comprehensive income (AOCI) resulting from the Tax Cuts and Jobs Act. ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, provides financial statement preparers with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The ASU requires financial statement preparers to disclose: · A description of the accounting policy for releasing income tax effects from AOCI; · Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act; and · Information about the other income tax effects that are reclassified. The amendments affect any organization that is required to apply the provisions of Topic 220, Income Statement—Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments are effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Organizations should apply the proposed amendments either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. FASB Issues Corrections and Improvements to Financial Instruments. Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, Financial Instruments—Overall (Subtopic 825-10) - Issue 1: Equity Securities without a Readily Determinable Fair Value— Discontinuation. Fair Value Measurement - Issue 2: Equity Securities without a Readily Determinable Fair Value— Adjustments - Issue 3: Forward Contracts and Purchased Options - Issue 4: Presentation Requirements for Certain Fair Value Option Liabilities Derivatives and Hedging— Embedded Derivatives Financial Instruments - Issue 5: Fair Value Option Liabilities Denominated in a Foreign Currency. - Issue 6: Transition Guidance for Equity Securities without a Readily Determinable Fair Value Financial Services— Insurance For public business entities, ASU 2018-03 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. Public business entities with fiscal years beginning between December 15, 2017, and June 15, 2018, are not required to adopt ASU 2018-03 until the interim period beginning after June 15, 2018, and public business entities with fiscal years beginning between June 15, 2018, and December 15, 2018, are not required to adopt these amendments before adopting the amendments in ASU 2016-01. For all other entities, the effective date is the same as the effective date in ASU 2016-01. All entities may early adopt ASU 2018-03 for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, as long as they have adopted ASU 2016-01. FASB Adds SEC Guidance to the Codification on the Tax Cuts and Jobs Act. Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. Tax Cuts and Jobs Act ASU 2018-05 adds the following guidance, among other things, to the FASB Accounting Standards Codification™ regarding the Act: - Question 1: - Answer 1: - Question 2: - Answer 2: - Qualitative disclosures of the income tax effects of the Act for which the accounting is incomplete; 1. Disclosures of items reported as provisional amounts; 2. Disclosures of existing current or deferred tax amounts for which the income tax effects of the Act have not been completed; 3. The reason why the initial accounting is incomplete; 4. The additional information that is needed to be obtained, prepared, or analyzed in order to complete the accounting requirements under Topic 740; 5. The nature and amount of any measurement period adjustments recognized during the reporting period; 6. The effect of measurement period adjustments on the effective tax rate; and 7.When the accounting for the income tax effects of the Act has been completed. ASU 2018-05 is effective upon inclusion in the FASB Codification. The FASB Issues ASU No. 2018-06 to Supersede Circular 202 for Depository and Lending Institutions. Codification Improvements to Topic 942, Financial Services—Depository and Lending Accounting for Net Deferred Tax Charges (Circular 202) in Subtopic 942-740, Financial Services—Depository and Lending—Income Taxes The amendments in ASU 2018-06 are effective immediately. The FASB has issued an Accounting Standards Update (ASU) intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. The ASU expands the scope of Topic 718, Compensation—Stock Compensation Equity—Equity-Based Payments to Non-Employees The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other companies, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers FASB Releases ASU No. 2018-09. Codification Improvements -Amendments to Subtopic 220-10, Income Statement— Reporting Comprehensive Income—Overall. -Amendments to Subtopic 470-50, Debt—Modifications and Extinguishments Accounting for Certain Hybrid Financial Instruments The Fair Value Option for Financial Assets and Financial Liabilities 1. When the fair value option has been elected on debt that is extinguished, the net carrying amount of the extinguished debt equals its fair value at the reacquisition date, and 2. Related gains or losses in other comprehensive income must be included in net income upon extinguishment of the debt. - Amendments to Subtopic 480-10, Distinguishing Liabilities from Equity—Overall. Derivatives and Hedging “Majority Owner’s Accounting for a Transaction in the Shares of a Consolidated Subsidiary and a Derivative Indexed to the Noncontrolling Interest in That Subsidiary.” - Amendments to Subtopic 718-740, Compensation—Stock Compensation—Income Taxes ASU No. 2018-09 - Amendments to Subtopic 805-740, Business Combinations— Income Taxes - Amendments to Subtopic 815-10, Derivatives and Hedging— Overall ASU No. 2018-09 -Amendments to Subtopic 820-10, Fair Value Measurement— Overall ASU No. 2018-09 The amendments to paragraphs 820-10-35-18D through 35-18F and 820-10-35- 18H through 35-18L revise the current guidance to allow portfolios of financial instruments and nonfinancial instruments accounted for as derivatives in accordance with Topic 815 Topic 815 - Amendments to Subtopic 940-405, Financial Services—Brokers and Dealers—Liabilities Balance Sheet—Offsetting—Other Presentation Matters - Amendments to Subtopic 962-325, Plan Accounting—Defined Contribution Pension Plans—Investments—Other Transition and Effective Date. ASU No. 2018-09 ASU No. 2018-09 In addition, there are some conforming amendments in ASU No. 2018-09 Financial Services—Insurance—Receivables Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities The FASB has issued Accounting Standards Update (ASU) No. 2018-10, Codification Improvements to Topic 842, Leases . ASU No. 2018-10 -Issue 1: Residual Value Guarantees in Topic 460, Guarantees -Issue 2: Rate Implicit in the Lease -Issue 3: Lessee Reassessment of Lease Classification -Issue 4: Lessor Reassessment of Lease Term and Purchase Option -Issue 5: Variable Lease Payments That Depend on an Index or a Rate -Issue 6: Investment Tax Credits -Issue 7: Lease Term and Purchase Option -Issue 8: Transition Guidance for Amounts Previously Recognized in Business Combinations Topic 840 Topic 840 Topic 842 Topic 840 -Issue 9: Certain Transition Adjustments Topic 842 -Issue 10: Transition Guidance for Leases Previously Classified as Capital Leases under Topic 840 Topic 840 Topic 842 Topic 842 Topic 840 -Issue 11: Transition Guidance for Modifications to Leases Previously Classified as Direct Financing or Sales-Type Leases under Topic 840 Topic 840 Topic 842 Topic 842 -Issue 12: Transition Guidance for Sale and Leaseback Transactions -Issue 13: Impairment of Net Investment in the Lease -Issue 14: Unguaranteed Residual Asset Topic 840. -Issue 15: Effect of Initial Direct Costs on Rate Implicit in the Lease -Issue 16: Failed Sale and Leaseback Transaction Effective Date The amendments in ASU No. 2018-10 ASU No. 2016-02 Topic 842 ASU No. 2018-10 Topic 842 Topic 842 Topic 842 FASB Issues Targeted Improvements to Lease Standard . Leases (Topic 842): Targeted Improvements “The targeted improvements in the ASU address areas our stakeholders identified as sources of unnecessary cost or complexity in the leases standard,” stated FASB Chairman Russell G. Golden. “They represent the FASB’s commitment to proactively address implementation issues raised by our stakeholders to ensure a successful transition to the new standard without compromising the quality of information provided to investors.” ASU 2018-11 Transition: Comparative Reporting at Adoption The amendments ASU 2018-11 , Leases An entity that elects this additional (and optional) transition method must provide the required Topic 840 disclosures for all periods that continue to be in accordance with Topic 840. The amendments do not change the existing disclosure requirements in Topic 840 (for example, they do not create interim disclosure requirements that entities previously were not required to provide). Separating Components of a Contract The amendments in ASU 2018-11 · The timing and pattern of transfer of the nonlease component(s) and associated lease component are the same. · The lease component, if accounted for separately, would be classified as an operating lease. An entity electing this practical expedient (including an entity that accounts for the combined component entirely in Topic 606) is required to disclose certain information, by class of underlying asset, as specified in the ASU. Effective Date The amendments in ASU 2018-11 related to separating components of a contract affect the amendments in ASU No. 2016-02, which are not yet effective but can be early adopted. For entities that have not adopted Topic 842 before the issuance of this ASU, the effective date and transition requirements for the amendments in this update related to separating components of a contract are the same as the effective date and transition requirements in ASU 2016-02. For entities that have adopted Topic 842 before the issuance of ASU 2018-11, the transition and effective date of the amendments related to separating components of a contract in this ASU are as follows: · The practical expedient may be elected either in the first reporting period following the issuance of this ASU or at the original effective date of Topic 842 for that entity. · The practical expedient may be applied either retrospectively or prospectively. All entities, including early adopters, that elect the practical expedient related to separating components of a contract in this ASU must apply the expedient, by class of underlying asset, to all existing lease transactions that qualify for the expedient at the date elected. FASB Improves Guidance for Insurance Companies that Issue Long-Duration Contracts To improve this area of financial reporting, the new ASU: - Requires updated assumptions for liability measurement. - Standardizes the liability discount rate. - Provides greater consistency in measurement of market risk benefits - Simplifies amortization of deferred acquisition costs. - Requires enhanced disclosures For calendar-year public companies, the changes will be effective in 2021. For all other calendar-year companies, the changes will be effective in 2022. Early adoption is permitted. The FASB has issued Accounting Standards Update (ASU) No. 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework ASU No. 2018-13 Removals The following disclosure requirements were removed from Topic 820: - The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; - The policy for timing of transfers between levels; - The valuation processes for Level 3 fair value measurements; and - For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. Modifications The following disclosure requirements were modified in Topic 820: -In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities; - For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and - The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Additions The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities: - The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and -The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. In addition, the amendments eliminate at a minimum from the phrase “an entity shall disclose at a minimum” to promote the appropriate exercise of discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements. Effective Date The amendments in ASU No. 2018-13 The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospe |
