| Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation These consolidated
financial statements, accompanying notes, and related disclosures have been prepared pursuant to the rules and regulations of the
U.S. Securities and Exchange Commission (“SEC”). These financial statements have been prepared using the accrual basis
of accounting in accordance with the generally accepted accounting principles (“GAAP”) in the United States. The Company’s
fiscal year end is December 31. The Company’s financial statements are presented in US dollars. Basis of consolidation The consolidated financial
statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.
Entity Name Incorporation date Entity Owned By Nature of Operation Country of Incorporation
DaXingHuaShang Investment Group Limited July 4, 2016 FVTI Investment holding Seychelles
DaXingHuaShang Investment (Hong Kong) Ltd (“DILHK”) June 22, 2016 DIGLS Investment holding Hong Kong, China
Qianhai DaXingHuaShang Investment (Shenzhen) Co. Ltd. (“QHDX”) November 3, 2016 DILHK Investment holding China
Dongguan City France Vin Tout Ltd. (“FVTL”) May 31, 2011 QHDX Trading of wine China Use of estimates The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America 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. The estimates and judgments will also affect the reported amounts for
certain revenues and expenses during the reporting period. Actual results may materially differ from these estimates. Foreign currency translation and
re-measurement The Company translates
its foreign operations to the U.S. dollar in accordance with ASC 830, “ Foreign Currency Matters The reporting currency
for the Company and its subsidiaries is the US dollar. The Company’s, DIGLS’, and DILH’s functional currency
is the U.S. dollar; QHDX and FVTL use the Chinese Renminbi (“RMB”) as their functional currency. The Company’s
subsidiaries, whose records are not maintained in that company’s functional currency, re-measure their records into their
functional currency as follows:
● Monetary assets and liabilities at exchange rates in effect at the end of each period
● Nonmonetary assets and liabilities at historical rates
● Revenue and expense items at the average rate of exchange prevailing during the period Gains and losses from
these re-measurements were not significant and have been included in the Company’s results of operations. The Company’s
subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows:
● Assets and liabilities at the rate of exchange in effect at the balance sheet date
● Equities at the historical rate
● Revenue and expense items at the average rate of exchange prevailing during the period Adjustments arising
from such translations are included in accumulated other comprehensive income in shareholders’ equity.
September 30, 2018 December 31, 2017 September 30, 2017
Spot RMB: USD exchange rate $ 0.1454 0.14415 $ 0.1507
Average RMB: USD exchange rate $ 0.1536 0.15031 $ 0.1472 The RMB is not freely convertible into foreign
currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that
the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation. Cash and cash equivalents Cash and cash equivalents
include cash on hand, deposits in banks, and any investments with maturities with less three months from inception to maturity.
The Company’s primary bank deposits are located in the Hong Kong and the PRC; those deposits are not provided protection
under FDIC insurance; however, management has determined that the risk of loss from insolvency by those financial institution at
which it has deposited it funds is insignificant. Accounts receivable Accounts receivable are carried at the amounts
invoiced to customers less allowance for doubtful accounts. The allowance is an estimate based on a review of individual customer
accounts on a regular basis. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously
written off are recorded when received. The Company reviews the collectability of accounts
receivable based on an assessment of historical experience, current economic conditions, and other collection indicators. During the two years ended December 31, 2017
and the nine months ended September 30, 2018, the Company did not experience any delinquent or uncollectible balances; accordingly,
the Company did not record any valuation allowance for bad debt during this period. Inventories Inventories consisting of finished goods are
stated at the lower of cost or market value. The Company used the weighted average cost method of accounting for inventory. Inventories
on hand are evaluated on an on-going basis to determine if any items are obsolete, spoiled, or in excess of future demand. The
Company provides impairment that is charged directly to cost of sales when is has been determined the product is obsolete, spoiled,
and the Company will not be able to sell it at a normal profit above its carrying cost. The Company’s primary products are
alcoholic beverages; the selling price of alcoholic beverages tend to increase over time; however, there are circumstances where
alcoholic beverages may be subject to spoilage if stored for prolong periods of time. The Company did not experience an impairment
on inventory during the nine months ended September 30, 2018. Advances and prepayments to suppliers In certain instances, in order to secure the
supply of limited and sought-after wines and liquors, the Company will make advance payments to suppliers for the procurement of
inventory. Upon physical receipt and inspection of such products from those suppliers, the applicable balances are reclassified
from advances and prepayments to suppliers to inventory. Property, plant and equipment Equipment is carried at cost less accumulated
depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives
of the equipment are as follows:
Equipment 7 - 20 years The cost of maintenance and repairs is charged
to expenses as incurred, whereas significant renewals and betterments are capitalized. Accounting for long-lived assets The Company annually reviews its long-lived
assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable.
Impairment may be the result of becoming obsolete from a change in the industry or new technologies. Impairment is present if the
carrying amount of an asset is less than its undiscounted cash flows to be generated. If an asset is considered impaired, a loss
is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to sell. Customer advances and deposits On certain occasions, the Company may receive
prepayments from downstream retailers or retails customer for wines and liquor prior to their taking possession of the Company’s
products; the Company records these receipts as customer advances and deposits until it has met all the criteria for recognition
of revenue including the passing possession of the products to its customer, at such point Company will reduce the customer and
deposits balance and credit the Company’s revenues. Revenue recognition Revenues are recognized when the Company has
negotiated the terms of the transaction, which includes determining and fixing the sales price, the transfer of possession of the
product to the customer, the customer does not have the right to return the product, the customer is able to further sell or transfer
the product onto others for economic benefit without any other obligation to be fulfilled by the Company, and the Company is reasonably
assured that funds have been or will be collected from the customer. The Company’s gross revenue consists the value of goods
invoiced, net of any value-added tax (VAT) or excise tax. Advertising All advertising costs are expensed as incurred.
Advertising expense for the three and nine months ended September 30, 2018 and September 30, 2017 were $0 and 0, respectively. Shipping and handling Outbound shipping and handling are expensed
as incurred. Retirement benefits Retirement benefits in the form of mandatory
government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as a part
of overhead. Income taxes The Company accounts for income tax using an
asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability
approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for
deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits,
or that future realization is uncertain. Statutory reserves Statutory reserves are referring to the amount
appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital,
as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit
must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until
the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital. Earnings per share The Company computes earnings per share (“EPS”)
in accordance with ASC Topic 260, “Earnings per share”. 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. Financial instruments The Company’s accounts for financial
instruments in accordance to ASC Topic 820, “Fair Value Measurements and Disclosures,” which requires disclosure of
the fair value of financial instruments held by the Company and ASC Topic 825, “Financial Instruments,” which defines
fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure
requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current
liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period
of time between the origination of such instruments and their expected realization and their current market rate of interest. The
three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology
are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology
include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability,
either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology
are unobservable and significant to the fair value measurement. Commitments and contingencies Liabilities for loss contingencies arising
from claims, assessments, litigation, fines and penalties 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. Comprehensive income Comprehensive income is defined to include
all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all
items that are required to be recognized under current accounting standards as components of comprehensive income are required
to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s
current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss. Goodwill Goodwill represents the excess of the purchase
price over the fair value of the net tangible and identifiable assets acquired in a business combination. In accordance with FASB
ASC Topic 350, “Goodwill and Other Intangible Assets”, goodwill is no longer subject to amortization. Rather, goodwill
is subject to at least an annual assessment for impairment, applying a fair-value based test. Fair value is generally determined
using a discounted cash flow analysis. Recent accounting pronouncements On January 5, 2016, the FASB issued ASU 2016-01
“Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”,
which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains
many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement
of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at
fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new
standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Management
has determined that the new pronouncement did not have a material impact on these financial statements. On February 25, 2016, the FASB issued ASU 2016-02
“Leases (Topic 842)”, its new standard on accounting for leases. ASU 2016-02 introduces a lessee model that brings
most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those
in ASC 606, the FASB’s new revenue recognition standard (e.g., those related to evaluating when profit can be recognized).
Furthermore, the ASU addresses other concerns related to the current leases model. For example, the ASU eliminates the requirement
in current U.S. GAAP for an entity to use bright-line tests in determining lease classification. The standard also requires lessors
to increase the transparency of their exposure to changes in value of their residual assets and how they manage that exposure.
The new model represents a wholesale change to lease accounting. As a result, entities will face significant implementation challenges
during the transition period and beyond, such as those related to: Applying judgment and estimating. ● Managing the complexities of data collection,
storage, and maintenance. ● Enhancing information technology systems
to ensure their ability to perform the calculations necessary for compliance with reporting requirements. ● Refining internal controls and other
business processes related to leases. ● Determining whether debt covenants
are likely to be affected and, if so, working with lenders to avoid violations. ● Addressing any income tax implications. The new guidance will be effective for public
business entities for annual periods beginning after December 15, 2018 (e.g., calendar periods beginning on January 1, 2019), and
interim periods therein. Management is still evaluating the accounting impact of the new pronouncement. On March 15, 2016, the FASB issued ASU 2016-07
“Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting”,
which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an
investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree
of influence. Consequently, when an investment qualifies for the equity method (as a result of an increase in the level of ownership
interest or degree of influence), the cost of acquiring the additional interest in the investee would be added to the current basis
of the investor’s previously held interest and the equity method would be applied subsequently from the date on which the
investor obtains the ability to exercise significant influence over the investee. The ASU further requires that unrealized holding
gains or losses in accumulated other comprehensive income related to an available-for-sale security that becomes eligible for the
equity method be recognized in earnings as of the date on which the investment qualifies for the equity method. The guidance in
the ASU is effective for all entities for fiscal years beginning after December 15, 2016, including interim periods within those
fiscal years; early adoption is permitted for all entities. Entities are required to apply the guidance prospectively to increases
in the level of ownership interest or degree of influence occurring after the ASU’s effective date. Additional transition
disclosures are not required upon adoption. Management has determined that new pronouncement did not have a material effect on
these financial statements. On March 17, 2016, the FASB issued ASU 2016-08
“Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus
Net)”, which amends the principal-versus-agent implementation guidance and illustrations in the Board’s new revenue
standard (ASU 2014-09). The FASB issued the ASU in response to concerns identified by stakeholders, including those related to
(1) determining the appropriate unit of account under the revenue standard’s principal-versus-agent guidance and (2) applying
the indicators of whether an entity is a principal or an agent in accordance with the revenue standard’s control principle.
Among other things, the ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified
good or service promised in a contract with a customer. As defined in the ASU, a specified good or service is “a distinct
good or service (or a distinct bundle of goods or services) to be provided to the customer.” Therefore, for contracts involving
more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent
for others. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early
adoption provisions in ASU 2015-14). In addition, entities are required to adopt the ASU by using the same transition method they
used to adopt the new revenue standard. The Company has determined that it acts as a principal in its primary business operations. On March 30, 2016, the FASB issued ASU 2016-09
“Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, which
simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities,
including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification
in the statement of cash flows. The ASU is for annual reporting periods beginning after December 15, 2016, including interim periods
within those annual reporting periods. Management has determined that the new standard did not have a material impact on these
financial statements. |
