| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US
GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited condensed
consolidated financial statements include the accounts of the Company and include the assets, liabilities, revenues and expenses of its
subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Prior to December 31, 2021, Sino-Global Shipping
Agency Ltd. (“Sino-China”) was considered a Variable Interest Entity (“VIE”), with the Company as the primary
beneficiary. The Company, through Trans Pacific Beijing, entered into certain agreements with Sino-China, pursuant to which the Company
received 90% of Sino-China’s net income. As a VIE, Sino-China’s revenues were included
in the Company’s total revenues, and any income/loss from operations was consolidated with that of the Company. Because of contractual
arrangements between the Company and Sino-China, the Company had a pecuniary interest in Sino-China that required consolidation of the
financial statements of the Company and Sino-China. The Company has consolidated Sino-China’s
operating results in accordance with Accounting Standards Codification (“ASC”) 810-10, “Consolidation”.
The agency relationship between the Company and Sino-China and its branches was governed by a series of contractual arrangements
pursuant to which the Company had substantial control over Sino-China. On December 31, 2021, the Company entered into a series of agreements
to terminate its VIE structure and deconsolidated its formerly controlled entity Sino-China. (b) Fair Value of Financial Instruments The Company follows the provisions of ASC 820,
Fair Value Measurements and Disclosures, which clarifies the definition of fair value, prescribes methods for measuring fair value, and
establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 — Observable inputs such as unadjusted
quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2 — Inputs other than quoted prices
that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market
data. Level 3 — Unobservable inputs that reflect
management’s assumptions based on the best available information. The carrying value of accounts receivable, other
receivables, other current assets, and current liabilities approximate their fair values because of the short-term nature of these instruments. (c) Use of Estimates and Assumptions The preparation of the Company’s unaudited
condensed consolidated financial statements in conformity with US GAAP 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 dates of the financial statements
and the reported amounts of revenues and expenses during the reporting periods. Estimates are adjusted to reflect actual experience when
necessary. Significant accounting estimates reflected in the Company’s unaudited condense consolidated financial statements include
revenue recognition, fair value of stock-based compensation, cost of revenues, allowance for credit losses, impairment loss, deferred
income taxes, income tax expense and the useful lives of property and equipment. The inputs into the Company’s judgments and estimates
consider the economic implications of COVID-19 on the Company’s critical and significant accounting estimates. Since the use of
estimates is an integral component of the financial reporting process, actual results could differ from those estimates. (d) Translation of Foreign Currency The accounts of the Company and its subsidiaries
are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”).
The Company’s functional currency is the U.S. dollar (“USD”) while its subsidiaries in the PRC, including Trans Pacific
Beijing and Trans Pacific Shanghai report their financial positions and results of operations in Renminbi (“RMB”), its subsidiary
Sino-Global Shipping (HK), Ltd. reports its financial positions and results of operations in Hong Kong dollars (“HKD”). The
accompanying consolidated unaudited condensed financial statements are presented in USD. Foreign currency transactions are translated
into USD using the fixed exchange rates in effect at the time of the transaction. Generally, foreign exchange gains and losses resulting
from the settlement of such transactions are recognized in the consolidated statements of operations. The Company translates the foreign
currency financial statements in accordance with ASC 830-10, “Foreign Currency Matters”. Assets and liabilities are translated
at current exchange rates quoted by the People’s Bank of China at the balance sheets’ dates and revenues and expenses are
translated at average exchange rates in effect during the year. The resulting translation adjustments are recorded as other comprehensive
loss and accumulated other comprehensive loss as a separate component of equity of the Company, and also included in non-controlling
interests. The exchange rates as of March 31, 2023 and June
30, 2022 and for the three and nine months ended March 31, 2023 and 2022 are as follows:
March 31, June 30, Three months ended Nine months ended
Foreign currency Balance Balance 2023 2022 2023 2022
RMB:1USD 6.8689 6.6994 6.8423 6.3483 6.9321 6.4048
HKD:1USD 7.8500 7.8474 7.8386 7.8044 7.8369 7.7906 (e) Cash Cash consists of cash on hand and cash in banks
which are unrestricted as to withdrawal or use. The Company maintains cash with various financial institutions mainly in the PRC, Australia,
Hong Kong and the U.S. As of March 31, 2023 and June 30, 2022, cash balances of $96,790 and $143,044, respectively, were maintained at
financial institutions in the PRC. $10,212 nil nil (f) Cryptocurrencies Cryptocurrencies, mainly bitcoin, are included
in current assets in the accompanying consolidated balance sheets. Cryptocurrencies purchased are recorded at cost. Fair value of the
cryptocurrency award received is determined using the quoted price of the related cryptocurrency at the time of receipt. Cryptocurrencies are accounted for as intangible
assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment
annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived
asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the
cryptocurrency at the time its fair value is being measured. In testing for impairment, the Company has the option to first perform a
qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not
more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise,
it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new
cost basis of the asset. Subsequent reversal of impairment losses is not permitted. (g) Receivables and Allowance for Credit Losses Accounts receivable are presented at net realizable
value. The Company maintains allowances for credit losses. The Company reviews the accounts receivable on a periodic basis and makes
general and specific allowances when there is doubt as to the collectability of individual receivable balances. In evaluating the collectability
of individual receivable balances, the Company considers many factors, including the age of the balances, customers’ historical
payment history, their current credit-worthiness and current economic trends. The estimate of expected credit losses is based on information
about past events, current economic conditions, and forecasts of future economic conditions that affect collectability. Receivables are
generally considered past due after 180 days. The Company reserves 25%-50% of the customers balance aged between 181 days to 1 year,
50%-100% of the customers balance over 1 year and 100% of the customers balance over 2 years. Accounts receivable are written off against
the allowances only after exhaustive collection efforts. Other receivables represent mainly customer advances,
prepaid employee insurance and welfare benefits, which will be subsequently deducted from the employee payroll, project advances as well
as office lease deposits. Management reviews its receivables on a regular basis to determine if the credit loss is adequate, and adjusts
the allowance when necessary. The estimate of expected credit losses is based on information about past events, current economic conditions,
and forecasts of future economic conditions that affect collectability. Delinquent account balances are written-off against allowance
for credit losses after management has determined that the likelihood of collection is not probable. Other receivables are written off
against the allowances only after exhaustive collection efforts. (h) Property and Equipment, net Property and equipment are stated at historical
cost less accumulated depreciation. Historical cost comprises its purchase price and any directly attributable costs of bringing the
assets to its working condition and location for its intended use. Depreciation is calculated on a straight-line basis over the following
estimated useful lives:
Buildings 20 years
Motor vehicles 3-10 years
Computer and office equipment 1-5 years
Furniture and fixtures 3-5 years
System software 5 years
Leasehold improvements Shorter of lease term or useful lives
Mining equipment 3 years The carrying value of a long-lived asset is considered
impaired by the Company when the anticipated undiscounted cash flows from such asset is less than its carrying value. If impairment is
identified, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair
value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved or based on independent
appraisals. For the three and nine months ended March 31, 2023 and 2022, no impairments were recorded. (i) Investments in unconsolidated entity Entities in which the Company has the ability
to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method. Significant influence
is generally considered to exist when the Company has voting shares representing 20% to 50%, and other factors, such as representation
on the board of directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity
method of accounting is appropriate. Under this method of accounting, the Company records its proportionate share of the net earnings
or losses of equity method investees and a corresponding increase or decrease to the investment balances. Dividends received from the
equity method investments are recorded as reductions in the cost of such investments. The Company generally considers an ownership interest
of 20% or higher to represent significant influence. The Company accounts for the investments in entities over which it has neither control
nor significant influence, and no readily determinable fair value is available, using the investment cost minus any impairment, if necessary. Investments are evaluated for impairment when
facts or circumstances indicate that the fair value of the long-term investment is less than its carrying value. An impairment loss is
recognized when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether
a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration
of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near-term prospects of the investment;
and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. On January 10,
2020, the Company entered into a cooperation agreement with Mr. Shanming Liang, a shareholder of the Company, to set up a joint venture
in New York named LSM Trading Ltd. (“LSM”) in which the Company holds a 40% equity interest. Mr. Shanming Liang subsequently
transferred his shares to Guanxi Golden Bridge Industry Group Co., Ltd in October 2021. For the year ended June 30, 2022, the Company
invested $210,000 and recorded $47,181 investment loss. The joint venture has not started its operations due to COVID-19. Due to continuing
loss of the investee, we determined the loss is other than temporary and provided full impairment of our equity investment. The Company
recorded nil (j) Convertible notes The Company evaluates its convertible notes to
determine if those contracts or embedded components of those contracts qualify as derivatives. The result of this accounting treatment
is that the fair value of the embedded derivative is recorded at fair value each reporting period and recorded as a liability. In the
event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income
or expense. (k) Revenue Recognition The Company recognizes revenue which represents
the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled
in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a
point in time or over time, based on when control of goods and services transfers to a customer. The Company uses a five-step model to recognize
revenue from customer contracts. The five-step model requires the Company to (i) identify the contract with the customer, (ii) identify
the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that
it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations
in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. For the Company’s freight logistic,
the Company provides transportation services which include mainly shipping services. The Company derives transportation revenue from
sales contracts with its customers with revenues being recognized upon performance of services. Sales price to the customer are
fixed upon acceptance of the sales contract and there is no separate sales rebate, discount, or other incentive. The
Company’s revenues are recognized at a point in time after all performance obligations were satisfied For the Company’s warehouse services, which
are included in the freight logistic services, the Company’s contracts provide the customer an integrated service that includes
two or more services, including but not limited to warehousing, collection, first-mile delivery, drop shipping, customs clearance packaging,
etc. Accordingly, the Company generally identifies one performance obligation in its contracts, which is a series of distinct services
that remain substantially the same over time and possess the same pattern of transfer. Revenue is recognized over the period in which
services are provided under the terms of the Company’s contractual relationships with its clients. Accordingly, the Company generally identifies
one performance obligation in its contracts, which is a series of distinct services that remain substantially the same over time and
possess the same pattern of transfer. Revenue is recognized over the period in which services are provided under the terms of the Company’s
contractual relationships with its clients. The transaction price is based on the amount
specified in the contract with the customer and contains fixed and variable consideration. In general, the fixed consideration in a contract
represents facility and equipment costs incurred to satisfy the performance obligation and is recognized on a straight-line basis over
the term of the contract. The variable consideration is comprised of cost reimbursement determined based on the costs incurred. Revenue
relating to variable pricing is estimated and included in the consideration if it is probable that a significant revenue reversal will
not occur in the future. The estimate of variable consideration is determined by the expected value or most likely amount method and
factors in current, past and forecasted experience with the customer. Customers are billed based on terms specified in the revenue contract
and they pay us according to approved payment terms. Revenue for the above services is recognized
on a gross basis when the Company controls the services as it has the obligation to (i) provide all services (ii) bear any inventory
risk for warehouse services. In addition, the Company has control to set its selling price to ensure it would generate profit for the
services. For the nine months ended March 31, 2023, the
Company engaged in resale of cryptocurrency mining equipment. For the three months ended March 31, 2023, the Company did not sell crypto-mining
machines. On January 10, 2022, the Company’s joint
venture, Thor Miner, entered into a Purchase and Sale Agreement with SOS Information Technology New York Inc. (the “Buyer”).
Pursuant to the Purchase and Sale Agreement, Thor Miner agreed to sell and the Buyer agreed to purchase certain cryptocurrency mining
equipment. The Company’s performance obligation was
to deliver products according to contract specifications. The Company recognizes product revenue at a point in time when the control
of products or services are transferred to customers. To distinguish a promise to provide products from a promise to facilitate the sale
from a third party, the Company considers the guidance of control in ASC 606-10-55-37A and the indicators in ASC 606-10-55-39. In general, revenue was recognized on a gross
basis when the Company controls the products as it has the obligation to (i) fulfill the products delivery and custom clearance (ii)
bear any inventory risk as legal owners. In addition, when establishing the selling prices for delivery of the resale products, the Company
has control to set its selling price to ensure it would generate profit for the products delivery arrangements. If the Company is not
responsible for provision of product and does not bear inventory risk, the Company recorded revenue on a net basis. For the nine months ended March 31, 2023, the
Company recognized the sale of cryptocurrency mining equipment based on net basis as the manufacturer of the products was responsible
for shipping and custom clearing for the products. For the three months ended March 31, 2023, the Company did not recognize any sale
of cryptocurrency mining equipment. Contract balances The Company records receivables related to revenue
when the Company has an unconditional right to invoice and receive payment. Deferred revenue consists primarily of customer
billings made in advance of performance obligations being satisfied and revenue being recognized. Contract balance amounted to $205,477
and $6,955,577 as of March 31, 2023 and June 30, 2022, respectively. The Company’s disaggregated revenue streams
are described as follows:
For
the Three Months For
the Nine Months
March 31, March 31, March 31, March 31,
Sale of crypto
mining machines $ - $ - $ 732,565 $ -
Freight
logistics services 759,905 971,747 2,739,475 2,829,682
Total $ 759,905 $ 971,747 $ 3,472,040 $ 2,829,682 Disaggregated information of revenues by geographic locations are
as follows:
For the Three Months For the Nine Months
March 31, March 31, March 31, March 31,
2023 2022 2023 2022
PRC $ 535,037 $ 648,964 $ 1,695,858 $ 2,242,296
U.S. 224,868 322,783 1,776,182 587,386
Total revenues $ 759,905 $ 971,747 $ 3,472,040 $ 2,829,682 (l) Leases The Company adopted FASB ASU 2016-02, “Leases”
(Topic 842) for the year ended June 30, 2020, and elected the practical expedients that does not require us to reassess: (1) whether
any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial
direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting
policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to
treat the lease and non-lease components of a lease as a single lease component. Upon adoption, the Company recognized right of use (“ROU”)
assets and same amount of lease liabilities based on the present value of the future minimum rental payments of leases, using an incremental
borrowing rate of 7% based on the duration of lease terms. Operating lease ROU assets and lease liabilities
are recognized at the adoption date or the commencement date, whichever is earlier, based on the present value of lease payments over
the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company use its incremental borrowing
rate based on the information available at the commencement date in determining the present value of lease payments. The incremental
borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the
lease payments, in a similar economic environment and over a similar term. Lease terms used to calculate the present value
of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable
certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating
lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception,
therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally
do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line
basis over the lease term. The Company reviews the impairment of its ROU
assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived
assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment
of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax
cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested
asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. (m) Taxation Because the Company and its subsidiaries and
Sino-China were incorporated in different jurisdictions, they file separate income tax returns. The Company uses the asset and liability
method of accounting for income taxes in accordance with U.S. GAAP. Deferred taxes, if any, are recognized for the future tax consequences
of temporary differences between the tax basis of assets and liabilities and their reported amounts in the unaudited condensed consolidated
financial statements. A valuation allowance is provided against deferred tax assets if it is more likely than not that the asset will
not be utilized in the future. The Company recognizes the tax benefit from an
uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities,
based on the technical merits of the position. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits
as income tax expense. The Company had no uncertain tax positions as of March 31, 2023 and June 30, 2022. Income tax returns for the years prior to 2018
are no longer subject to examination by U.S. tax authorities. PRC Enterprise Income Tax PRC enterprise income tax is calculated based
on taxable income determined under the PRC Generally Accepted Accounting Principles (“PRC GAAP”) at 25%. Sino-China and Trans
Pacific Beijing were incorporated in the PRC and are subject to the Enterprise Income Tax Laws of the PRC. PRC Value Added Taxes and Surcharges The Company is subject to value added tax (“VAT”).
Revenue from services provided by the Company’s PRC subsidiaries are subject to VAT at rates ranging from 9% to 13%. Entities that
are VAT general taxpayers are allowed to offset qualified VAT paid to suppliers against their VAT liability. Net VAT liability is recorded
in taxes payable on the consolidated balance sheets. In addition, under the PRC regulations, the Company’s
PRC subsidiaries are required to pay city construction tax (7%) and education surcharges (3%) based on the net VAT payments. (n) Earnings (loss) per Share Basic earnings (loss) per share is computed by
dividing net income (loss) attributable to holders of common stock of the Company by the weighted average number of shares of common
stock of the Company outstanding during the applicable period. Diluted earnings (loss) per share reflect the potential dilution that
could occur if securities or other contracts to issue common stock of the Company were exercised or converted into common stock of the
Company. Common stock equivalents are excluded from the computation of diluted earnings per share if their effects would be anti-dilutive. For the three and nine months ended March
31, 2023 and 2022, there was no dilutive effect of potential shares of common stock of the Company because the Company generated a
net loss. (o) Comprehensive Income (Loss) The Company reports comprehensive income (loss)
in accordance with the authoritative guidance issued by Financial Accounting Standards Board (the “FASB”) which establishes
standards for reporting comprehensive income (loss) and its component in financial statements. Other comprehensive income (loss) refers
to revenue, expenses, gains and losses that under US GAAP are recorded as an element of stockholders’ equity but are excluded from
net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using
the U.S. dollar as its functional currencies. (p) Stock-based Compensation The Company accounts for stock-based compensation
awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that
stock-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized
as compensation expense over the requisite service period. The Company records stock-based compensation expense at fair value on the
grant date and recognizes the expense over the employee’s requisite service period. The Company accounts for stock-based compensation
awards to non-employees in accordance with FASB ASC Topic 718 amended by ASU 2018-07. Under FASB ASC Topic 718, stock compensation granted
to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument issued, whichever
is more reliably measured and is recognized as an expense as the goods or services are received. Valuations of stock-based compensation are based
upon highly subjective assumptions about the future, including stock price volatility and exercise patterns. The fair value of share-based
payment awards was estimated using the Black-Scholes option pricing model. Expected volatilities are based on the historical volatility
of the Company’s stock. The Company uses historical data to estimate option exercise and employee terminations. The expected term
of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods
within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. (q) Risks and Uncertainties The Company’s business, financial position
and results of operations may be influenced by the political, economic, health and legal environments in the PRC, as well as by the general
state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically
associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic,
health and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in the
political, regulatory and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws
and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other
things. In March 2020, the World Health Organization
declared the COVID-19 as a pandemic. Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of the
Company’s business operations and the workforce are concentrated in China and United States, the Company’s business, results
of operations, and financial condition have been adversely affected for the three and nine months ended March 31, 2023. The situation
remains highly uncertain for any further outbreak or resurgence of the COVID-19. It is therefore difficult for the Company to estimate
the impact on the business or operating results that might be adversely affected by any further outbreak or resurgence of COVID-19. (r) Disposal of subsidiaries and VIE On December 31, 2021, the Company entered into
a series of agreements to terminate its VIE structure and deconsolidated its formerly controlled entity Sino-Global Shipping Agency Ltd.
(“Sino-China”). The Company controlled Sino-China through its wholly owned subsidiary Trans Pacific Beijing. The Company
made the decision to dissolve the VIE structure and Sino-China because Sino-China has no active operations and the Company wanted to
remove any potential risks associated with any VIE structures. In addition, the Company dissolved its subsidiary Sino-Global Shipping
LA, Inc. On March 14, 2022, the Company discontinued its subsidiary Sino-Global Shipping Canada, Inc., no gain or loss was recognized
in the deconsolidation. In November 2022, the Company dissolved its subsidiary Sino-Global Shipping Australia Pty Ltd., no material gain
or loss was recognized. Since the disposal did not represent any strategic
change of the Company’s operation, the disposal was not presented as a discontinued operation. Net assets of the entities disposed and loss
on disposal was as follows:
For the three and nine months ended
March 31, 2022
VIE Subsidiaries Total
Total current assets $ 83,573 $ 20,898 $ 104,471
Total other assets 8,723 - 8,723
Total assets 92,296 20,898 113,194
Total current liabilities 41,608 1,100 42,708
Total net assets 50,688 19,798 70,486
Noncontrolling interests 5,919,050 - 5,919,050
Exchange rate effect 142,080 - 142,080
Total loss on disposal $ 6,111,818 $ 19,798 $ 6,131,616 (s) Recent Accounting Pronouncements In May 2019, the FASB issued ASU 2019-05, which
is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured
at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial
Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting
for available-for-sale debt securities, which must be individually assessed for credit losses w |
