| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
accompanying consolidated financial statements include the balances and results of operations of the Company. The consolidated financial
statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”)
and in conformity with generally accepted accounting principles in the U.S. (“US GAAP”). The
accompanying consolidated financial statements are presented on the basis that the Company is a going concern. The going concern assumption
contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Basis
of Consolidation The
consolidated financial statements include the financial statements of the Company and its subsidiaries. Subsidiaries are all entities
over which the Company has control. Control exists when the Company has the power over the entity, exposure, or rights to variable returns
from involvement in the entity and the ability to use power over the entity to affect returns through its power over the entity. In assessing
control, potential voting rights that presently are exercisable are taken into account. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the date that control ceases. Economic
and Political Risks The
Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations
may be influenced by the political, economic, and legal environment in the PRC and 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, and legal environment
and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions
in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion,
remittances abroad and rates and methods of taxation. Foreign
Currency Translation The
Company’s reporting currency is the U.S. dollar, and the functional currency is the Chinese Renminbi (“RMB”). All assets
and liabilities are translated at exchange rates at the balance sheet date, revenue and expenses are translated at the average yearly
exchange rates and 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 equity. Transactions
in currencies other than the functional currencies during the period are converted into the applicable functional currencies at the applicable
rates of exchange prevailing at the dates of the transactions. Exchange gains and losses are recognized in the statements of operations.
The exchange rates utilized are as follows: SCHEDULE OF FOREIGN CURRENCY TRANSLATION
As
of and for the year ended July 31, 2021 As
of and for the year ended July 31, 2020
Period-end
RMB: US$1 exchange rate 6.46 6.98
Period-average
RMB: US$1 exchange rate 6.56 7.03 No
representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation. Use
of Estimates The
preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, related disclosures of contingent liabilities at the balance sheet date and revenue
and expenses in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s
financial statements include the valuation allowance for deferred tax assets, economic lives and impairment of property, plant and equipment,
allowance for doubtful accounts, etc. Actual results could differ from those estimates and such differences could affect the results
of operations reported in future periods. Fair
Value Measurement Accounting
Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures,” which defines fair value, establishes
a framework for measuring fair value and expands disclosures about fair value measurements. The statement clarifies that the exchange
price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in
which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset
or liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant
assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset. This
ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and
the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level
1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level
2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the
full term of the asset or liability; and Level
3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported
by little or no market activity). At
July 31, 2021, the Company has no financial assets or liabilities subject to recurring fair value measurements. The Company’s financial
instruments include cash, accounts receivable, advances to suppliers, other receivables, held for sale assets, accounts payable, other
payables, taxes payable and related party receivables or payables. Management estimates that the carrying amounts of financial instruments
approximate their fair values due to their short-term nature. The fair value of amounts with related parties is not practicable to estimate
due to the related party nature of the underlying transactions. Cash
and Cash Equivalents The
Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. All
cash and cash equivalents relate to cash on hand and cash at the bank as of July 31, 2021 and July 31, 2020. The
RMB is not freely convertible into foreign currencies. Under the PRC Foreign Exchange Control Regulations and Administration of Settlement,
Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange RMB for foreign currencies through banks that
are authorized to conduct foreign exchange business. Accounts
Receivable Financial
instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company
extends credit to its customers in the normal course of business and generally does not require collateral. The Company’s credit
terms are dependent upon the segment, and the customer. The Company assesses the probability of collection from each customer at the
outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness.
If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed. Management
performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and
its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing
accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade
receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness
of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship
and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates,
which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability
of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability. Accounts
receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for
doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.
No Inventories Inventories
consist of raw materials and finished goods and are stated at the lower of cost, determined on a weighted average basis, or net realizable
value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and
the estimated costs necessary to make the sale. When inventories are sold, their carrying amount is charged to expense in the period
in which the revenue is recognized. Write-downs for declines in net realizable value or for losses of inventories are recognized as an
expense in the period the impairment or loss occurs. The Company made no Held
for sale assets Held
for sale assets are stated at the lower of their cost or fair value less cost to sell. A gain is recognized for any subsequent increase
in fair value less cost to sell, but recognized gains may not exceed the cumulative losses previously recognized. Property,
plant and equipment Property,
plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over the assets’ estimated useful
lives, using the straight-line method. Estimated useful lives of the property, plant and equipment are as follows: SCHEDULE OF ESTIMATED USEFUL LIVES PROPERTY PLANT AND EQUIPMENT
Motor
vehicles 4
Office
equipment 3 The
cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is
included in the statement of income. The cost of maintenance and repairs is charged to the statement of income as incurred, whereas significant
renewals and betterments are capitalized. Impairment
of long-lived assets The
Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of
an asset may no longer be recoverable. Whenever there is an indication showing a permanent decrease in the amount of property, plant
and equipment, such as evidence of obsolescence or physical damage of an asset or significant changes in the manner in which an asset
is used or is expected to be used, the Company shall recognize loss on decrease in value of property, plant and equipment in the statement
of income where the carrying amount of the asset is higher than the recoverable amount. The Company measures impairment by comparing
the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets
and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the
Company would recognize an impairment loss based on the fair value of the assets. The Company did no Operating
leases The
Company determines if an arrangement contains a lease at inception. The Company elected the practical expedient, for all asset classes,
to account for each lease component of a contract and its associated non-lease components as a single lease component, rather than allocating
a standalone value to each component of a lease. For purposes of calculating operating lease obligations under the standard, the Company’s
lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option.
The Company’s leases do not contain material residual value guarantees or material restrictive covenants. Operating lease expense
is recognized on a straight-line basis over the lease terms. The discount rate used to measure a lease obligation is usually the rate
implicit in the lease; however, the Company’s operating leases generally do not provide an implicit rate. Accordingly, the Company
uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing
rate is an entity-specific rate that represents the rate of interest a lessee would pay to borrow on a collateralized basis over a similar
term with similar payments. Revenue
recognition Recognition
of revenue Revenue
is generated through the sale of goods and rendering services. Revenue is recognized when a customer obtains control of promised goods
or services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those
goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows
arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to
receive in exchange for those goods and services. The Company applies the following five-step model in order to determine this amount:
(i) identification
of the promised goods and services in the contract;
(ii) determination
of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the
contract;
(iii) measurement
of the transaction price, including the constraint on variable consideration;
(iv) allocation
of the transaction price to the performance obligations; and
(v) recognition
of revenue when (or as) the Company satisfies each performance obligation. The
Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled
to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606
at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which
of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated
to the respective performance obligations when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s
performance obligations are transferred to customers at a point in time, typically upon delivery. Contract
liabilities A
contract liability is the obligation to transfer goods to a customer for which the Company has received consideration (or an amount of
consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer,
a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). The Company’s contract
liabilities comprise advances from customers, which are recognized as revenue when the Company performs under the contract. The balances
of advances from customers as of July 31, 2021 and July 31, 2020 are $ 176,465 1,539,343 For
all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all service revenue contracts
with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules. Other
income and other expenses Other
income and other expenses are recognized on an accrual basis in accordance with the substance of the relevant agreements. Research
and development expenses Research
and development expenses include payroll, employee benefits and other operating expenses associated with research and platform development.
To date, expenditures incurred between when the application has reached the development stage and when it is substantially complete and
ready for its intended use have been inconsequential and, as a result, the Company did not capitalize any qualifying development costs
in the accompanying consolidated financial statements. Earnings
per share The
Company reports earnings per share in accordance with ASC 260 “Earnings Per Share,” which requires presentation of basic
and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic
earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common
shares outstanding during the reporting period. Diluted earnings per share takes into account the potential dilution that could occur
if securities or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common
shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations
of a basic and diluted earnings per share shall be adjusted retrospectively for all periods presented to reflect that change in capital
structure. The
Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of
the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary
share outstanding during the period plus the number of additional shares that would have been outstanding if potentially dilutive securities
had been issued. The Company had no Share
capital Incremental
costs directly attributable to the issue of shares are recognized as a deduction from equity. Related
party balances and transactions A
related party is generally defined as: (i)
any person that holds the Company’s securities, including such person’s immediate family, (ii)
the Company’s management, (iii)
someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv)
anyone who can significantly influence the consolidated financial and operating decisions of the Company. A
transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Income
taxes The
Company accounts for income taxes using the asset and liability method prescribed by ASC 740 “Income Taxes.” Under this method,
deferred tax assets and liabilities are determined based on the difference between the consolidated financial reporting and tax bases
of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse.
The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not
that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is
recognized as income or loss in the period that includes the enactment date. The
Company does no The
Company is governed by the Income Tax Laws of the PRC. The PRC federal statutory tax rate is 25% The
Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.
The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense
recognized during the year ended July 31, 2021 and the year ended July 31, 2020. The Company’s effective tax rate differs from
the PRC federal statutory rate primarily due to non-deductible expenses, temporary differences, and preferential tax treatment. Recently
issued and adopted accounting pronouncements In
June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses
on Financial Statements.” This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to
be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from
the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial
asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted
for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off
balance sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual
right to receive cash. For public business entities, the amendments in this Update are effective for fiscal years beginning after December
15, 2022, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect
adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective
approach). The Company is in the process of evaluating the impact of the adoption of this pronouncement on its financial statements. The
Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have
a significant impact on the Company’s financial statements. |
