| Summary of Significant Accounting Policies | Note
3 - Summary of Significant Accounting Policies Basis
of Consolidation The
accompanying consolidated Financial Statements include the accounts and transactions of DSSL and DSS (Predecessors) and Duo (Successor).
Duo World Inc. is the parent company of its 100 100 Use
of Estimates and Assumptions The
preparation of consolidated financial statements in conformity with U.S. 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Making
estimates and assumptions requires management to exercise significant judgment. It is least reasonably possible that the estimate of
the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered
in formulating its estimate could change in the near term due to one or more future non-confirming events. Accordingly, the actual results
could differ from those estimates and assumptions. The most significant estimates relate to the timing and amounts of revenue recognition,
the recognition and disclosure of contingent liabilities and the collectability of accounts receivable. Risks
and Uncertainties The
Company’s operations are subject to significant risk and uncertainties including financial, operational, competition and potential
risk of business failure. Product revenues are concentrated in the application software industry, which is highly competitive and rapidly
changing. Significant technological changes in the industry or customer requirements, or the emergence of competitive products with new
capabilities or technologies could adversely affect operating results. Concentrations
of Credit Risk Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents
and accounts receivable. The Company maintains cash and cash equivalents with various high quality financial institutions and we monitor
the credit ratings of those institutions. The Company’s sales are primarily to the companies located in Sri Lanka, Singapore Indonesia
and India. The Company performs ongoing credit evaluations of our customers, and the risk with respect to trade receivables is further
mitigated by the diversity, both by geography and by industry, of the customer base. Accounts receivable are due principally from the
companies understated contract terms. Provisions A
provision is recognized when the company has present obligations because of past event and when it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligations and reliable estimate can be made of amount of the obligation.
Provisions are not discounted at their present value and are determined based on the best estimate required to settle the obligation
at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Accounts
Receivable and Provision for Doubtful Accounts The
Company recognizes accounts receivable in connection with the products sold and services provided and has strong policies and procedures
for the collection receivables from its clients. However, there are inevitably occasions when the receivables due to the Company cannot
be collected and, therefore, have to be written off as bad debts. While the debt collection process is being pursued, an assessment is
made of the likelihood of the receivable being collectable. A provision is therefore, made against the outstanding receivable to reflect
that component that may not become collectable. The Company is in the practice of provisioning for doubtful debts based on the period
outstanding as per the following: Schedule of Provision for Doubtful Debts Based on Period Outstanding
Trade receivables outstanding: Provision
Over 24 months 100 %
Over 18 months 50 %
Over 15 months 25 %
Over 12 months 10 %
Over 9 months 5 % Cash
Equivalents The
Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September
30, 2021, and March 31, 2021, there were no Foreign
Currency Translation The
functional currencies of the Company’s foreign subsidiaries are their local currencies. For financial reporting purposes, these
currencies have been converted into United States Dollars ($) and/or USD as the reporting currency. All assets and liabilities denominated
in foreign functional currencies are converted into U.S. dollars at the closing exchange rate on the balance sheet date and equity balances
are converted at historical rates. Revenues, costs and expenses in foreign functional currencies are converted at the average rate of
exchange during the period. Conversion adjustments arising from the use of different exchange rates from period to period are included
as a component of shareholders’ deficit as “accumulated other comprehensive income (loss).” Gains and losses resulting
from foreign currency transactions are included in the statement of operations and comprehensive income /(loss) as other income (expense). Property
and Equipment Fixed
assets (including leasehold improvements) are stated at cost, net of accumulated depreciation and amortization. Depreciation is computed
utilizing the straight-line method over the estimated useful lives of the related assets. The estimated salvage value is considered as
NIL. Amortization of leasehold improvements is computed utilizing the straight-line method over the estimated benefit period of the related
assets, which may not exceed 15 Useful
lives of the fixed assets are as follows: Schedule of Estimated Useful Lives of Fixed Assets
Furniture & fittings 5
Improvements to lease hold assets Lease term
Office equipment 5
Computer equipment (Data processing equipment) 3
Website development 4 Impairment
of Long-Lived Assets The
Company reviews long-lived assets, such as property, plant, and equipment for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying
amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount
of the asset exceeds the fair value of the asset. Assets to be disposed of by sale would be separately presented in the balance sheet
and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities
of a group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. Fair
Value Measurements and Fair Value of Financial Instruments The
Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair
value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the
case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants
would use in pricing an asset or liability. The
estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and
accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these
instruments. Post
Retirement Benefit Plan The
Company has gratuity as post-employment plan for all the eligible employees. The recognition for the gratuity plan is as below, The
expected postretirement benefit obligation (“EPBO”) is the actuarial present value (“APV”) as of a specific date
of the benefits expected to be paid to the employee, beneficiaries, and covered dependents. Measurement
of the EPBO is based on the following: 1.
Expected amount and timing of future benefits 2.
Expected future costs 3.
Extent of cost sharing The
EPBO includes an assumed salary progression for a pay-related plan. Future compensation levels represent the best estimate after considering
the individual employees involved, general price levels, seniority, productivity, promotions, indirect effects, and the like. The
Accumulated postretirement benefit obligation (“APBO”) is the APV as of a specific date of all future benefits attributable
to service by an employee to that date. It represents the portion of the EPBO earned to date. After full eligibility is attained, the
APBO equals the EPBO. The APBO also includes an assumed salary progression for a pay-related plan. Revenue
Recognition, Deferred & Accrued Revenue The
Company recognizes revenue from the sale of software licenses and related services. The Company revenue recognition policy follows guidance
from Accounting Standards Codification (ASC) 606, Revenue from contract with customers. Revenue is recognized when the Company transferred
promised goods and services to the customer and in the amount that reflect the consideration to which the company expected to be entitled
in exchange for those goods and services. The
following five steps are followed in recognizing revenue from contracts:
● Identify
the Contract(s) with the customer;
● Identify
the performance obligation of the contract;
● Determine
the transaction price;
● Allocate
the transaction price to the performance obligations in the contract and;
● Recognize
revenue when or as the company satisfies a performance obligation. The
consideration for the transaction [performance obligation(s)] is determined as per the agreement, contract or invoice for the services
and products. Facetone ‘Facetone’
is a communication and collaboration platform, which provides users the capability of operating and running a high performance contact
center operation efficiently while saving cost and maximizing revenue opportunities. In-built Facetone CRM feature provides the opportunity
for contact centers to deliver a superior customer experience and build a better relationship by linking customers and data in real time. Smoothflow Smoothflow
automates customer engagements, including building ChatBots, VoiceBots and IoTBots to deliver an Omni channel customer service experience.
The product uses the power of artificial intelligence to keep improving the conversational flow and user experience. Revenue
is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we
expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products
and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized
net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature
of Products and Services Licenses
for on premise software Enterprise
software solutions Cloud
services AMC
Services For
the six months ended September 30, 2021 and 2020, the Company received only cash as consideration for sale of licenses and related services
rendered. For
the six months ended September 30, 2021 and 2020, the Company had following concentrations of revenues with customers: Schedule of Concentrations of Revenue
Customer September 30, 2021 September 30, 2020
A 32.14 % 3.04 %
B 25.98 % 4.00 %
C 24.83 % 2.19 %
D 10.13 % 2.55 %
E 0.00 % 83.40 %
F 0.00 % 3.15 %
Other misc. customers 6.92 % 1.67 %
100.00 % 100.00 % For
the six months ended September 30, 2021 and 2020, the company had following sales by products: Schedule of Sales by Products
Product September 30, 2021 September 30, 2020
Facetone $ 47,596 $ 28,274
Software hosting and reselling 7,109 8,563
DuoSubscribe - 237,133
$ 54,705 $ 273,970 Significant
Judgments The
Company’s contract with customers includes multiple Software products and services to deliver and in the most of the contract the
price of the separately identifiable features are stated separately. In the event the price of the multiple product and services are
not mentioned in the agreement the Company allocate transaction price estimating the standalone selling price of the promised Products
and the services. The determination of standalone selling price for each performance obligation requires judgments. The Company determines
standalone selling price for performance obligations based on overall pricing strategies, which consider market in which the company
operates, historical data analysis, number of users of the product or services, size of the customer and the market price of the hardware
used. Contract
Balances When
the timing of revenue recognition differs from the timing of invoicing for contract with customers, differed revenue and accrued
revenue/ unbilled accounts receivables are recognized by the Company. Revenue under Software Implementation contracts are invoiced
on stages of completion as stipulates in the agreement and the revenue recognized when the performance obligations are met and
customer sign the user acceptance test (UAT). The Company invoices software license fee and royalty fee at the end of the period
according to the customer agreement and accrued revenue/ unbilled revenue is recognized for the relevant period. The maintenance fee
is invoiced beginning of the period and the Company recognizes as deferred revenue in the financial statements and is ratably
recognized over a period of service. The
allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine
the allowance based on known troubled accounts, historical experience, and other currently available evidence. Refer
Note- 5 for “Accounts receivables and Provision for doubtful debts” Segment
Information The
Company has determined that its Chief Executive Officer is its Chief Operating Decision Maker. The Company’s executive reviews
financial information presented on a consolidated basis for the purposes of assessing the performance and making decisions on how to
allocate resources. Accordingly, the Company has determined that it operates in a single reportable segment. Deferred
Revenue 21,567 2,898 Accrued
Revenue/Unbilled Accounts Receivable 1,036 1,076 The
Company had no contract liabilities and assets recognized for cost to fulfill a requirement of a customer as at September 30, 2021. Cost
of Revenue Cost
of revenue mainly includes purchases, product implementation costs, amortization of product development, developer support and implementation,
and consultancy fees related to the products offered by the Company. The aggregate cost related to the software implementations, including
support and consulting services pertaining to the revenue recognized during the reporting period, is recognized as cost of revenue. Product
research and development Product
research and development expenses consist primarily of salary and benefits for the Company’s development and technical support
staff, contractors’ fees and other costs associated with the enhancements of existing products and services and development of
new products and services. Costs incurred for software development prior to technological feasibility are expensed as product research
and development costs in the period incurred. Once the point of technological feasibility is reached, which is generally upon the completion
of a working prototype that has no critical bugs and is a release candidate; development costs are capitalized until the product is ready
for general release and are classified within “Intangibles assets” in the accompanying consolidated balance sheets. The Company
amortizes capitalized software development costs using the greater of the ratio of the products’ current gross revenues to the
total of current gross revenues and expected gross revenues or on a straight-line basis over the estimated economic life of the related
product, which is typically four years. During
the six months ended September 30, 2020, product research and development cost of $ 9,050 no Advertising
Costs The
Company expenses advertising costs as incurred. No Income
Taxes The
Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date. Deferred tax assets and liabilities are not recognized
in the current financials due to recurring tax losses and the uncertainty of the realization of the tax allowances. Withholding
taxes deducted from the source of income from foreign operations are debited to profit and loss account due to non-refundable
status. Comprehensive
Income The
Comprehensive Income Topic of the FASB Accounting Standards Codification establishes standards for reporting and presentation of comprehensive
income and its components in a full set of financial statements. Comprehensive income from April 1, 2015 through September 30, 2021,
includes only foreign currency conversion gains (losses), and is presented in the Company’s consolidated statements of comprehensive
income. Changes
in Accumulated Other Comprehensive Income (Loss) by Component during the periods ending on September 30, 2021 and March 31, 2021 were
as follows: Schedule of Accumulated Other Comprehensive Income (Loss)
Foreign Currency Translation gains (losses)
Balance, March 31, 2021 $ 548,539
Translation rate gain (loss) (7,087 )
Balance, June 30, 2021 $ 541,452
Translation rate gain (loss) 26,428
Balance, September 30, 2021 567,881 Leases Lessor There
are no significant changes in recognizing the Lessor under ASC 842 compared to the previous model. Changes were made to the accounting
guidance of lessor and lessee, and the key aspects of the introduced model are to align the recognition criteria with new revenue
recognition standard ASC 606. Under the new guidance, contract consideration is allocated to its lease components and non-lease components
(such as maintenance). For the Company as a lessor, non-lease components of the contract will be accounted under ASC Topic 606, Revenue
from Contracts with Customers, unless the Company elects a lessor practical expedient to not separate the non-lease components from the
associated lease component. The amendments in ASU 2018-11 also provide lessors with a practical expedient, by class of underlying asset,
to not separate non-lease components from the associated lease component. To elect the practical expedient, the timing and pattern of
transfer of the lease and non-lease components must be the same and the lease component must meet the criteria to be classified as an
operating lease. If these criteria’s are met, the single component can be accounted either ASC 842 or ASC 606, depending on the
predominant component(s). The lessor practical expedient to not separate non-lease components from the associated component must be elected
for all existing and new leases. As
lessor, the Company expects that post-adoption substantially all existing leases will have no change in the timing of revenue recognition
until their expiration or termination. The Company expects to elect the lessor’s practical expedient to not separate non-lease
components such as maintenance from the associated lease for all existing and new leases and to account for the combined component as
a single lease component. The timing of revenue recognition is expected to be the same for the majority of the Company’s new leases
as compared to similar existing leases; however, certain categories of new leases could have different revenue recognition patterns as
compared to similar existing leases. For
the leases that are accounted as operating leases, income is recognized on a straight-line basis over the term of the lease contract.
Generally, when a lease is more than 180 days delinquent (where more than three monthly payments are owed), the lease is classified as
being on nonaccrual and the Company has to stops recognizing leasing income on that date. Payments received from leases in nonaccrual
status generally reduce the lease receivable. Leases on nonaccrual status remain classified as such until there is sustained payment
performance that, in the Company’s judgment, would indicate that all contractual amounts will be collected in full. Lessee The
Company adopted ASU 2016-02 effective April 1, 2019 using the modified retrospective approach. The new standard establishes a right-of-use
model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with
a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification
of expense recognition in the income statement. In connection with the adoption, the Company will elect to utilize the modified retrospective
presentation whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition,
the Company will elect the transition package of three practical expedients permitted within the standard, which eliminates the requirements
to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company will adopt
a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e.
leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component
for certain classes of assets. The
Company categorizes leases at their inception as either operating or capital leases. On certain lease agreements, the Company may receive
rent holidays and other incentives. The Company recognizes lease costs on a straight-line basis without considering the deferred payment
terms, such as rent holidays, that defer the commencement date of required payments. Recent
Accounting Pronouncements The
Company has reviewed the recent accounting pronouncements and believes that they will not have material impact on the Company’s
financial position and results of operations. |
