Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies Organization and Description of Business Luckwel Pharmaceuticals Inc. (“we”, “our”, the “Company” and formerly known as “Luckycom Pharmaceuticals Inc.” and “Luckycom Inc.”) plans to acquire, develop, manufacture and market pharmaceutical medication. Luckycom Limited, a wholly-owned subsidiary of Luckwel Pharmaceuticals Inc, was incorporated in Hong Kong as Goldsans Capital (Hong Kong) Limited (“Goldsans”) on November 08, 2011. Goldsans name was changed to Wudor Capital Hong Kong Limited on May 22, 2012 and subsequently to Luckycom Limited on June 28, 2013. On April 11, 2017, the Company filed a Certificate of Amendment to the Articles of Incorporation to change its name from Luckycom Pharmaceuticals Inc. to Luckwel Pharmaceuticals Inc. On December 13, 2017, the Company’s sole officer and director, and a shareholder, Mr. Kingrich Lee executed a Sold Note and Instrument of Transfer on behalf of Luckwel Pharmaceuticals Inc., pursuant to which the Company would sell to Ms. Lijian Li, Mr. Kingrich Lee’s sister, 10,000 shares of stock of the Company’s wholly-owned Hong Kong subsidiary, Luckycom Limited at a purchase price of HKD 1 (approximately $0.13) per share aggregating to HKD 10,000 (approximately $1,281). On the same date, the transaction was consummated with the payment of stamp duty to the Hong Kong tax department. Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and are presented in US dollars (“USD”). Principles of Consolidation These consolidated financial statements include the accounts of Luckwel Pharmaceuticals Inc., and its formerly-owned subsidiary Luckycom Limited. All intercompany balances and transactions have been eliminated in consolidation. On December 13, 2017, the Company disposed Luckycom Limited (See Note 6). Cash Cash include all cash in bank with no restrictions. The Company had $18,503 and $29,413 of cash as of March 31, 2018 and 2017, respectively. Fair Value of Financial Instruments The Company’s financial instruments consist of cash, other payable and accrued liabilities and loans payable to an officer. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. Income Taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. The Company recognizes interest as income tax, and recognizes penalties as other expenses. There are $nil and $60,000 tax penalties recorded for the years ended March 31, 2018 and 2017, respectively. The Company has filed tax return for the 2016 fiscal year and was in process of tax filings for the 2017 fiscal year up till the issuance of this report. Uncertain tax positions The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. Tax years from 2013 forward remain open to examination by the U.S. federal tax authority due to the carryover of net operating losses or tax credits. According to Hong Kong Inland Revenue Department, the statute of limitation is six years if any company chargeable with tax has not been assessed at less-than the proper amount, the statute of limitation is extended to 10 years of the underpayment of taxes is due to fraud or willful evasion. There were no uncertain tax positions as of March 31, 2018 and 2017 and the Company does not believe that its unrecognized tax benefits will change over the next twelve months. Use of Estimates The preparation of 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured. Stock-Based Compensation Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. The Company issued 6,000 shares as stock based compensation for services rendered for the year ended March 31, 2017. The Company did not have any stock based compensation for the year ended March 31, 2018. Loss Per Share Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted loss per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There were no potentially dilutive debt or equity outstanding as of March 31, 2018 and 2017, respectively. Comprehensive Income The Company has standards for reporting and display of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders’ (Deficit) Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income. Foreign Currency Translation The Company is based in Texas although it is incorporated in Nevada. The functional currency of the Company is U.S. Dollar, while the functional currency of Luckycom Ltd., (the formerly-owned subsidiary of the Company) is Hong Kong Dollar and is translated to U.S. dollars using the exchange rate effective for the date for assets and liabilities and the average exchange rate for the period reported for revenues and expenses. Recent Accounting Pronouncements In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this Update also require certain disclosures about stranded tax effects. Public business entities should apply the amendments in ASU 2018-02 for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of adopting ASU 2018-02 on its consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05, Income Tax (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. This update adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Act was signed into law. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |