| Significant Accounting Policies | NOTE 2 - SIGNIFICANT ACCOUNTING
POLICIES PRINCIPLES
OF CONSOLIDATION The consolidated financial statements include
the financial statements of its wholly-owned subsidiary, Photozou Koukoku. Intercompany transactions are eliminated. BASIS OF PRESENTATION The accompanying unaudited consolidated financial
statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC,
including the instructions to Form 10-Q and Regulation S-X. In the opinion of the management of the Company, all adjustments, which
are of a normal recurring nature, necessary for a fair statement of the results for the six months period, have been made. Results
for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.
When used in these notes, the terms “Company”, “we”, “us” or “our” mean the Company.
Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted
accounting principles in the United States of America has been omitted from these statements pursuant to such accounting principles
and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should
be read in conjunction with our consolidated financial statements for the year ended November 30, 2019, included in our Form 10-K. USE OF ESTIMATES The presentation 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 disclosures of contingent assets and liabilities as of the date of the financial
statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates and assumptions
made by management include going concern, allowance for doubtful accounts, valuation allowance on deferred income tax, inventory
obsolescence and sales allowance. Since early 2020, the global outbreak of the coronavirus disease 2019 (“COVID-19”)
has significantly affected economy in Japan, where the Company mainly operates its business. The extent to which the COVID-19 pandemic
may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject
to change. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material
impact to our consolidated financial statements as of May 31, 2020 and for the six months then ended. Actual results in the future
could vary from the amounts derived from management's estimates and assumptions. RELATED PARTY TRANSACTION The Company accounts for related party transactions
in accordance with ASC 850 ("Related Party Disclosures"). A related party is generally defined as (i) any person that
holds 10% or more of the Company's securities and their immediate families, (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 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. The Company conducts business with its related parties in the
ordinary course of business. Transactions involving related parties cannot
be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not
exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were
consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. FOREIGN CURRENCY TRANSLATION The Company maintains its books and record
in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic
environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are
translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities
denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange
rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations. The reporting
currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements
have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities
of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date.
Revenues and expenses are translated at average rates prevailing during the period. Shareholders’ equity is translated at
historical exchange rate at the time of transaction. The
gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive
income within the statements of shareholders’ equity. Translation of amounts from the local currency
of the Company into US$1 has been made at the following exchange rates:
May 31, 2020 May 31, 2019
Current JPY: US$1 exchange rate 107.77 108.26
Average JPY: US$1 exchange rate 108.50 110.69 COMPREHENSIVE INCOME OR LOSS ASC Topic 220, “Comprehensive Income”,
establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive
income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income,
as presented in the accompanying consolidated statements of shareholders’ equity consists of changes in unrealized gains
and losses on foreign currency translation. REVENUE RECOGNITION AND
DEFERRED REVENUE Starting December 1, 2018, the Company adopted
ASC 606 - Revenue from contracts with Customers . Revenue for used cameras is recognized when
the cameras are delivered to the customer. There is no deferred revenue as of May 31, 2020 or November 30, 2019. Disaggregated revenue of the Company is as
follows:
For the six months Percentage of For the six months Percentage of
ended total revenues ended total revenues
May 31, 2020 May 31, 2019
Revenue from cameras sold $ 120,342 94.8% 105,746 88.4%
Service revenue 6,563 5.2% 13,900 11.6%
Total 126,905 100% 119,646 100% RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-02,
“Leases (Topic 842)” and issued subsequent amendments to the initial guidance or implementation guidance including
ASU 2017-13, 2018-01, 2018-10, 2018-11, 2018-20 and 2019-01 (collectively, including ASU 2016-02, “ASC 842”). Under
ASC 842, lessees will be required to recognize all leases at the commencement date including a lease liability, which is a lessee’s
obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use (ROU) asset, which is
an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company adopted the standard on December
1, 2019 on a modified retrospective basis and did not restate comparable periods. The Company elected the package of practical
expedients permitted under the transition guidance, which allows the Company to carry forward the historical lease classification,
the assessment whether a contract is or contains a lease and initial direct costs for any leases that exist prior to adoption
of the new standard. The Company also elected the practical expedient not to separate lease and non-lease components for certain
classes of underlying assets and the short-term lease exemption for contracts with lease terms of 12 months or less. The Company
does not have any operating lease over 12 months. The adoption of this standard did not impact the Company’s consolidated
financial statements. |
