| Summary of accounting policies | 3. Summary of accounting policies Use
of estimates The
preparation of the consolidated financial statements in conformity with generally accepted accounting principles 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 revenue and expenses during the reporting period. Management
makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial
statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically
in the period when new information becomes available to management. Actual results could differ from those estimates. Consolidation The
accompanying consolidated financial statements include the accounts of the Company, it’s wholly subsidiary YER Brands Inc (“YER”).,
and its 55 35 Segment
Reporting The
Company reports segment information based on the “management” approach. The management approach designates the internal reporting
used by management for making decisions and assessing performance of its corporation wide basis in comparison to its various businesses.
The Company has three reportable segments. The business operations consist of Hero Wellness Systems, YER Brands and Sustainable Projects
Group. The segments are determined based on several factors including the nature of products and services, nature of production processes
and delivery channels and consultancy services. The operating segment’s performance is evaluated based on its segment income. Segment
income is defined as the gross sales and miscellaneous income. At December 30, 2021, revenues were reported as follows: Schedule of Segment Reporting
Year ended Year ended
December 31, 2021 December 31 2020
Sales
Sustainable Projects Group $ - $ -
YER Brands 233 4,069
Hero Wellness Systems 5,120 500
Total Sales $ 5,353 $ 4,569
Total Assets
Sustainable Projects Group 59,806 $ 10,049
YER Brands 255,108 284,973
Hero Wellness Systems 53,028 60,205
Total Assets $ 367,942 $ 355,227 Intangible
assets Intangible
assets are non-monetary identifiable assets, controlled by the Company that will produce future economic benefits, based on reasonable
and supportable assumptions about conditions that will exist over the life of the asset. An intangible asset that does not meet these
attributes will be recognized as an expense when it is incurred. Intangible assets that do, are capitalized and initially measured at
cost. Those with a determinable life will be amortized on a systematic basis over their future economic life. Those with a indefinite
useful life shall not be amortized until its useful life is determined to be longer indefinite. An intangible asset subject to amortization
shall be periodically reviewed for impairment. A recoverability test will be performed and, if applicable, unscheduled amortization is
considered. License
agreements have been capitalized, recorded at cost and amortized over the life of the contracts. Website costs have been capitalized
and will be subject to amortization once the website is operational. They will be amortized over the life of the license to which it
supports. Equipment Equipment
represents purchases made for assets, whose useful life was determined to be greater than one year. The assets are initially recorded
at cost and depreciated over their estimated useful lives on a 3 Loss
per share The
Company reports basic loss per share in accordance with ASC Topic 260 Earnings Per Share (“EPS”). Basic loss per share is
based on the weighted average number of common shares outstanding and diluted EPS is based on the weighted average number of common shares
outstanding and dilutive common stock equivalents. Basic EPS is computed by dividing net loss (numerator) applicable to common stockholders
by the weighted average number of common shares outstanding (denominator) for the period. All EPS presented in the financial statements
are basic EPS as defined by ASU 260, “ Earnings Per Share Website
development costs The
Company recognized the costs associated with developing a website in accordance with ASC 350-50 “Website Development Cost”
that codified the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”)
NO. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Relating to website development
costs the Company follows the guidance pursuant to the Emerging Issues Task Force (EITF) NO. 00-2, “Accounting for Website Development
Costs”. The website development costs are divided into three stages, planning, development and production. The development stage
can further be classified as application and infrastructure development, graphics development and content development. In short, website
development cost for internal use should be capitalized except content input and data conversion costs in content development stage. Costs
associated with the website consist primarily of website development costs paid to third party. These capitalized costs will be amortized
based on their estimated useful life over three years upon the website becoming operational. Internal costs related to the development
of website content will be charged to operations as incurred. Web-site development costs related to the customers are charged to cost
of sales. Concentration
of credit risk The
Company places its cash and cash equivalents with a high credit quality financial institution. The Company maintains United States Dollars.
The Company minimizes its credit risks associated with cash by periodically evaluating the credit quality of its primary financial institution. Financial
instruments The
Company’s financial instruments consist principally of cash, accounts payable, accrued liabilities and notes payable. The carrying
amounts of such financial instruments in the accompanying financial statements approximate their fair values due to their relatively
short-term nature or the underlying terms are consistent with market terms. It is the management’s opinion that the Company is
not exposed to any significant currency or credit risks arising from these financial instruments. Fair
value measurements The
Company follows the guidelines in ASC Topic 820 “Fair Value Measurements and Disclosures”. Fair value is defined as the price
that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair
value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk
measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions
and credit risk. The
Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases
the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement.
All financial instruments approximate their fair value.
Level
1 — Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.
Level
2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical
or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities
Level
3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants
would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option
pricing models and discounted cash flow models. Advertising
and Promotion Costs The
Company follows ASC 720 “Advertising Costs” and expenses costs as incurred. Revenue
recognition In
May 2014, the FASB issued guidance on the recognition of Revenue from Contracts with Customers. The core principle of the guidance is
that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance
provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including
transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires
additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including
significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Inventory Inventories
are stated at the lower of cost or net realizable value using the first-in, first out (FIFO) cost method of accounting. Cost is determined
using the first in, first out (FIFO) cost method. Costs include the cost of purchase and transportation costs that are directly incurred
to bring the inventories to their present location, and duty. Net realizable value is the estimated selling price of the inventory in
the ordinary course of business, less any estimated selling costs. Stock
based compensation The
Company follows the guideline under ASC 718, “Stock Compensation”. The standard provides that for all stock-based compensation
plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, which requires
that all share-based payments to both employees and directors be recognized in the income statement based on their fair values. For non-employees
stock-based compensation, the Company applies ASC 505 Equity-Based Payments to Non-employees. This standard provides that all stock-based
compensation related to non-employees be measured at the fair value of the consideration received or the fair value of the equity instruments
issued, whichever can be most reliably be measured or determinable. In
June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718), Improvements to Non-employee
Share-Based Payment Accounting”, which is intended to improve the usefulness of the information provided to the users of financial
statements while reducing cost and complexity in financial reporting. Under the new standard, nonemployee share-based payment awards
within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when
conditions necessary to earn the right to benefit from the instruments have been satisfied. These equity-classified non-employee share-based
payment awards are measured at the grant date. Consistent with the accounting for employee share-based payment awards, an entity considers
the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. The new standard
also eliminates the requirement to re-assess classification of such awards upon vesting. The new standard is effective for annual periods,
and interim periods within those annual periods, beginning after December 15, 2018. The adoption of this new standard does not have an
impact on the Company’s financial statements. Operating
Leases In
February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”). The new standard establishes a right-of-use model that
requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12
months. For leases with an initial term of 12 months or less, a lessee is permitted to make an accounting policy election by class of
underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense
for such leases generally on a straight-line basis over the term of the lease. Leases will be classified as either finance or operating,
with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type,
finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will
be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract.
The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years,
with early adoption permitted. The Company adopted the new standard June 01, 2018. The Company has elected not to recognize lease assets
and lease liabilities for leases with an initial term of 12 months or less. Credit
Losses In
June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses”. The ASU sets forth a “current
expected credit loss” (CECL) model which requires the Company to measure all expected credit losses for financial instruments held
at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing
incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies
to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim
periods within those fiscal years, with early adoption permitted. Recently, the FASB issued the final ASU to delay adoption for smaller
reporting companies to calendar year 2023. The Company is currently assessing the impact of the adoption of this ASU on its financial
statements. Government
forgivable loans The
Company initially records government loans that may be forgiven as debt. The loan is shown as a cash inflow from financing activities
and then as a non-cash reconciling items on the operation cash flow when it is forgiven. However, if the Company reaches all the
criteria for forgiveness, it may record the proceeds as a grant. Discontinued
operations Discontinued
operations are components of an entity that either have been disposed or abandoned or is classified as held for sale. Additionally, in
order to qualify as a discontinued operation, the disposal or abandonment must represent a strategic shift that has or will have, a major
effect on an entity’s operations and financial results. Income
taxes The
Company follows the guideline under ASC Topic 740 Income Taxes. “Accounting for Income Taxes” which requires the recognition
of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between
the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory
tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established,
when necessary, to reduce deferred tax assets to the amount expected to be realized. Since the Company is in the developmental stage
and has losses, no deferred tax asset or income taxes have been recorded in the financial statements. There are no uncertain tax positions
as at December 31, 2021 and 2020. Recently
issued accounting pronouncements The
Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued,
which may be in advance of their effective date. Management does not believe that any pronouncements not included above will have a material
effect on the accompanying financial statements. |
