| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Principles 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”). This basis of accounting involves the application of accrual accounting and consequently, revenue and gains are recognized
when earned, and expenses and losses are recognized when incurred. The Company’s consolidated financial statements are expressed
in U.S. dollars.
b) Principles of Consolidation The accompanying consolidated financial
statements include the accounts of the Company and its significant subsidiaries on a consolidated basis. The Company also includes subsidiaries
over which a direct or indirect legal or effective control exists and for which the Company is deemed to direct the significant activities
and has the obligation to absorb the losses or benefits of the entities. All intercompany accounts, balances and transactions with consolidated
entities have been eliminated. Acquisition of Sweet Lollipop, Long Yun HK by Dragon
Victory The acquisitions were accounted under
U.S. GAAP as a business combination under common control with Dragon Victory being the acquirer and Sweet Lollipop and Long Yun HK being
the acquirees because all entities were controlled directly or indirectly by the same majority shareholder Mr. Yu Han. The consolidation
has been presented at historical costs and on a retroactive basis to reflect the capital structure of Sweet Lollipop and Long Yun HK as
a recapitalization. The business combination transaction
of Sweet Lollipop was completed and effective on June 26, 2015 and Sweet Lollipop became a 100% owned subsidiary of Dragon Victory. The business combination transaction
of Long Yun HK was completed and effective on August 10, 2015 and Long Yun HK became a 100% owned subsidiary of Sweet Lollipop. VIE Agreements between WFOE I
and HangZhouLongyun and its shareholders (subsequently between WFOE II and HangZhouLongyun) The Company evaluates the need to consolidate
its VIE, in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity
at risk for the entity to finance its activities without additional subordinated financial support. The transactions contemplated by the
Original VIE agreements consummated on August 19, 2016, and subsequent terminated were replaced by the New VIE Agreements consummated
on March 20, 2018 to take full advantage of certain preferential tax treatments and subsidies granted by the local government of Shangcheng
District of Hangzhou, Zhejiang province, where WFOE II was incorporated. WFOE I and WFOE II shall be collectively referred to as the “WFOEs.” The purpose and design of the VIE Agreements
between the WFOEs and HangZhouLongyun, was to consolidate Hangzhou Longyun under the Company by way of common control. ASC 810-10-25-38F
states that a reporting entity’s involvement in the design of a VIE may indicate that the reporting entity had the opportunity and
the incentive to establish arrangements that result in the reporting entity being the variable interest holder with the power to direct
the activities that most significantly impact the VIE’s economic performance. As both the Company and HangZhouLongyun are commonly
control by Mr. Yu Han and Ms. Koulin Han, both immediately before and after the acquisition, this transaction was accounted for as a merger
under common control, using merger accounting as if the merger had been consummated at the beginning of the earliest period presented,
and no gain or loss was recognized. All the assets and liabilities of HangZhouLongyun are carried using their original basis. Hence, HangZhouLongyun
was consolidated under the Company since its inception due to the purpose and design of the establishment of the VIE Agreements. The purpose of the VIE Agreements is
solely to give the WFOEs the exclusive control over HangZhouLongyun’s management and operations. While there is no restriction for
HangZhouLongyun, our VIE entity, to pay the WFOEs, our wholly owned subsidiary, there are certain restrictions for the WFOEs to make payments
to the holding companies due to certain regulations imposed by the Chinese government on out-going foreign currency wire transfers. Additionally,
there could be potential tax implications when moving the cash flows up to the Company. Therefore, the Company intends to retain any earnings
within HangZhouLongyun, and the retained cash flows would be utilized in expanding the Company’s business. The significant terms of the VIE Agreements are summarized
below: Exclusive Business Cooperation Agreement Pursuant to the Exclusive Business Cooperation
Agreement between HangZhouLongyun and the WFOEs, the WFOEs provide HangZhouLongyun with technical support, consulting services and other
management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in
technology, human resources, and information. Additionally, HangZhouLongyun grants an irrevocable and exclusive option to the WFOEs to
purchase from HangZhouLongyun, any or all of its assets, to the extent permitted under the PRC laws. The WFOEs own all intellectual property
rights that are developed during the course of the agreement. For services rendered to HangZhouLongyun by the WFOEs under the Exclusive
Business Cooperation Agreement, the service fee HangZhouLongyun is obligated to pay is calculated based on the time of services rendered
multiplied by the corresponding rate, which is approximately equal to the net income of HangZhouLongyun. The Exclusive Business Cooperation Agreement
will remain in effect for ten years until it is terminated by the WFOEs with 30-day prior notice. HangZhouLongyun does not have the right
to terminate the agreement unilaterally. Share Pledge Agreement Under the Share Pledge Agreement between
the shareholders of HangZhouLongyun and the WFOEs, the various shareholders of HangZhouLongyun pledged all of their equity interests in
HangZhouLongyun to the WFOEs to guarantee the performance of HangZhouLongyun’s obligations under the Business Cooperation Agreement.
Under the terms of the Share Pledge Agreement, in the event that HangZhouLongyun or its shareholders breach their respective contractual
obligations under the Exclusive Business Cooperation Agreement, the WFOEs, as pledgee, will be entitled to certain rights, including,
but not limited to, the right to collect dividends generated by the pledged equity interests. The shareholders of HangZhouLongyun also
agreed that upon occurrence of any event of default, as set forth in the Share Pledge Agreement, the WFOEs are entitled to dispose of
the pledged equity interest in accordance with applicable PRC laws. The shareholders of HangZhouLongyun further agree not to dispose of
the pledged equity interests or take any actions that would prejudice the WFOEs’ interest. Exclusive Option Agreement Under the Exclusive Option Agreement,
the shareholders of HangZhouLongyun irrevocably granted the WFOEs (or their designee) an exclusive option to purchase, to the extent permitted
under PRC law, all of the equity interests in HangZhouLongyun. The option price is equal to the capital paid in by the HangZhouLongyun
shareholders. The agreement remains effective for a term of ten years and may be renewed at the WFOEs’ election. Power of Attorney Under the Power of Attorney, the shareholders
of HangZhouLongyun authorize the WFOEs to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders,
including but not limited to: (a) attending shareholders’ meetings; (b) exercising all the shareholder’s rights, including
voting, that shareholders are entitled to under the laws of China and the Articles of Association, including but not limited to the sale
or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal
representative, the executive director, supervisor, the chief executive officer and other senior management members of HangZhouLongyun. Under these contractual arrangements
with the VIE, the Company has the power to direct activities of the VIE and can have assets transferred out of the VIE under its control.
Therefore, the Company considers that there is no asset in any of the consolidated VIE that can be used only to settle obligations of
the VIE, except for registered capital and PRC statutory reserves. As the consolidated VIE is incorporated as limited liability companies
under the PRC Company Law, creditors of the VIE do not have recourse to the general credit of the Company for any of the liabilities of
the consolidated VIE. The Company’s management has determined that via the VIE Agreements, it is the primary beneficiary of Hangzhou
Longyun. The Company’s total assets and
liabilities presented in the consolidated financial statements represent substantially portion of the total assets and liabilities of
the VIE because the other entities in the consolidation are non-operating holding entities with significantly less assets and liabilities. The following financial statement amounts
and balances of the VIE, were included in the accompanying consolidated financial statements as of March 31, 2021 and 2020, and for the
years ended March 31, 2021, 2020 and 2019, respectively:
As of March 31,
2021 2020
Current assets
Cash and cash equivalents $ 856,515 $ 156,485
Investment 3,974,915 4,452,884
Investment - related party 3,966,476 2,524,197
Amounts due from non-VIE subsidiaries of the Company 1,350,052 1,103,922
Other assets 31,272 357,588
10,179,230 8,595,075
Noncurrent assets
Other assets 60,544 13,372
Total Assets $ 10,239,774 $ 8,608,448
Current liabilities
Accounts and other payable 32,156 3,912
Customer advances 270,981 234,606
Amounts due to related party 688,371 72,890
Amounts due to non-VIE subsidiaries of the Company 3,845,718 1,404,647
Right of use liabilities 29,739 -
Provision for taxation 1,972,025 1,874,529
Total current liabilities 6,838,990 3,590,583
Right of use liabilities – non-current portion 9,913 -
Total Liabilities $ 6,848,903 $ 3,590,583
For the year ended March 31,
2021 2020 2019
Net revenues $ 225,749 $ 11,159 $ 2,744,277
Net (loss) income $ (2,830,799 ) $ (922,923 ) $ 1,767,306
Net cash (used in) provided by operating activities $ (94,732 ) $ (56,317 ) $ 2,278,534
Net cash provided by (used in) investing activities $ 663,140 $ 71,399 $ (4,610,931 )
Net cash provided by financing activities $ 251,951 $ 310,577 $ 96,137
c) Noncontrolling interests For the Company’s non-wholly owned
subsidiaries, a noncontrolling interest is recognized to reflect the portion of equity that is not attributable, directly or indirectly,
to the Company.
d) Use of Estimates The preparation of financial statements
in conformity with U.S. generally accepted accounting principles requires that management 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
and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. As of March
31, 2021, the Company considered the economic implications of the COVID-19 pandemic on its significant judgments and estimates. Given
the impact and other unforeseen effects on the global economy from the COVID-19 pandemic, these estimates required increased judgment,
and actual results could differ from these estimates.
e) Foreign Currency Translation The Company uses the United States dollar
(“U.S. dollars” or “USD”) for financial reporting purposes and to maintain its books and records. The Company’s
subsidiaries maintain their books and records in their functional currency which is in Chinese Renminbi (“RMB”). In general, for consolidation purposes,
the Company translates its assets and liabilities into U.S. dollars using the applicable exchange rates prevailing at the balance sheet
date, the statements of operations and cash flows are translated at average exchange rates during the reporting period, and the equity
accounts are translated at historical rates. As a result, amounts related to assets and liabilities reported on the statement of cash
flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Adjustments resulting from the translation
of the financial statements are recorded as accumulated other comprehensive income or loss. Exchange rate used for the translation as follows:
March 31, March 31, March 31,
2021 2020 2019
Period/year end RMB:US$ exchange rate 6.5536 7.0876 6.71111
Period/annual average RMB:US$ exchange rate 6.7772 6.9798 6.71075
Period/year end HKD:US$ exchange rate 7.7742 7.7705 7.84934
Period/annual average HKD:US$ exchange rate 7.7524 7.7588 7.84162
f) Cash and cash equivalents The Company considers all short-term,
highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Cash and cash equivalents
primarily represent bank deposits, fixed deposits with maturities of less than three months, and investments in money market funds.
g) Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are carried at the
amount billed to a customer, net of the allowance for doubtful accounts, which is an estimate for credit losses based on a review of all
outstanding amounts on a regular basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer
receivables and considering a customer’s financial condition, credit history and current economic conditions. Accounts receivable
are written off when deemed uncollectible against allowances provided. 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.
h) Investments Cost Method Investments Direct and/or indirect investments in
business entities in which the Company does not have a controlling financial interest and has no ability to exercise significant influence
over operating and financial policies (generally 0 – 20 percent ownership), are accounted for by the cost method. Equity Method Investments Direct and/or indirect investments in
business entities in which the Company does not have a controlling financial interest but has the ability to exercise significant influence
over operating and financial policies (generally 20 – 50 percent ownership), are accounted for by the equity method. Held-to-Maturity Investments The Company had certain held-to-maturity
debt instrument as investments. These investments were not impaired and were recorded at their carrying values which were based on the
amortized cost basis approximate their fair market value; accordingly, the Company has not recognized any unrecognized gain or losses
in the other comprehensive income. There were no derivative instruments that were used to hedge these investments. These investments are accounted as short-term
investments as they had maturities with one year or less.
i) Property and Equipment Property and equipment are stated at
cost, net of accumulated depreciation. Depreciation is charged to operations using the straight-line method over the estimated useful
lives of the assets. Property and equipment and its estimated useful lives as follows:
Computer Equipment 1 – 3 years
Office Equipment 4 – 5 years
Motor Vehicle 4 years Expenditures for maintenance and repairs
are charged to operations as incurred. Expenditures for betterments and major renewals are capitalized. The cost of assets sold or retired
and the related amounts of accumulated depreciation are eliminated from the accounts in the year of disposal, and any resulting gains
or losses are included in operations.
j) Intangible Assets with Definite Lives Intangible assets are stated at cost,
net of accumulated amortization. Amortization is charged to operations using the straight-line method over the estimated useful lives
of the assets. Intangible assets and its estimated useful lives as follows:
Software 5 years
k) Impairment of long-lived assets other than goodwill The Company reviews long-lived assets
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 the future undiscounted net cash flows
expected to be generated by the asset. If the assets are considered to be impaired, the impairment recognized is measured by the amount
by which the carrying amount of the assets exceeds the fair value of the assets. Impairment of long-lived assets recognized for the years
ended March 31, 2021, 2020 and 2019 was nil, nil and nil, respectively.
k) Leases In April 2019, the Company adopted ASU
2016-02, “Leases (Topic 842)”, including certain transitional guidance and subsequent amendments within ASU 2018-01, ASU 2018-10,
ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, including ASU 2016-02, “ASC 842”). ASC 842 supersedes the lease requirements
in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding
right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows
arising from leasing arrangements. Leases that transfer substantially all of the benefits and risks incidental to the ownership of assets
are accounted for as finance leases as if there was an acquisition of an asset and incurrence of an obligation at the inception of the
lease. All other leases are accounted for as operating leases. The Company has no significant finance leases. The Company adopted the new lease standard
using the modified retrospective method by applying the new lease standard to all leases existing as of April 1, 2019, the date of initial
application, and no adjustments were made to the comparative periods. Upon the initial application of ASC 842 on April 1, 2019, the Company’s
office lease with a total carrying amount of $160,552 was identified as operating lease right-of-use assets (Note 13). Such amount is
included in the opening balance of operating lease right-of-use assets as of April 1, 2019 with no adjustments made to the comparative
periods. The Company elected the package of practical
expedients permitted under the transition guidance, which allowed the Company to carry forward previous lease classification, the assessment
on whether a contract was or contained a lease, and the initial direct costs for any leases that existed prior to April 1, 2019. Adoption
of the new standard resulted in the recognition of operating lease right-of-use assets and liabilities of approximately $147,172 on the
consolidated balance sheet as of April 1, 2019. The adoption of the new lease standard does not have any significant impact on the consolidated
statements of comprehensive income and cash flows and there was no adjustment to the beginning retained earnings on April 1, 2019. Under ASC 842, the Company determines
if an arrangement is a lease at inception. Operating lease right-of-use assets and operating lease liabilities are initially recognized
based on the present value of future lease payments at lease commencement. The operating lease right-of-use asset also includes any lease
payments made prior to lease commencement and the initial direct costs incurred by the lessee and is recorded net of any lease incentives
received. As the interest rates implicit in most of the leases are not readily determinable, the Company uses the incremental borrowing
rates based on the information available at lease commencement to determine the present value of the future lease payments. Operating
lease expenses are recognized on a straight-line basis over the term of the lease. The Company elected to combine the lease
and non-lease components for leases of certain asset classes. Lease and non-lease components for leases of other asset classes are accounted
for separately. The Company also elected not to recognize short-term leases with an initial lease term of twelve months or less.
l) Revenue Recognition In
2014, the FASB issued guidance on revenue recognition (“ASC 606”), with final amendments issued in 2016. The underlying principle
of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC
606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1)
identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3)
determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue
as each performance obligation is satisfied. The Company has applied the five-step model to recognize revenue when it is probable that
the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company has
concluded that the new guidance did not require any significant change to its revenue recognition processes. Crowdfunding Fees The Company generates its revenue from
success fees from transactions on its crowdfunding platform. Revenue from these transactions is accounted for at the moment a project
is successfully funded. At the start of a funding campaign,
the entrepreneur enters into a contract with the Company pursuant to which he or she agrees to pay the Company a success fee once a successful
fund-raising campaign for that entrepreneur closes. Once the funding campaign has closed, the Company’s success fee is either collected
from the funds raised prior to transferring the net proceeds of the funding to the entrepreneur or to be collected from the entrepreneur
after the net proceeds of the funding are transferred to the entrepreneur. Upon completion of the funding campaign,
services delivered under the contract with the entrepreneur have been completed and the Company recognizes its success fee revenue, net
of any discounts given at the time the campaign has been closed successfully. Also, because the success fee percentage is stated in the
contract with the entrepreneur prior to the start of the funding campaign, the Company believes that this amount is fixed and, assuming
the successful conclusion of the funding campaign, collectible from the entrepreneur. This revenue recognition policy complies with ASC
606 in that it is based on written agreements with the entrepreneurs, contractual services have been completed, pricing is fixed and determinable
based on agreements with the customer and collectability is reasonably assured as the customers of the Company have just received their
new funding. Incubation Service Fees The Company generates its revenue by
providing business and operation advisory services relating to matters related to marketing, sales, and strategic planning, and ancillary
services such as coordinating human resources, legal, accounting, operations, assisting with feasibility studies and other types of services
at the election of the entrepreneur. The Company provides its incubation services on an ongoing and/or as-needed basis, pursuant to consulting
agreements with the entrepreneurs. For ongoing basis services, revenue is recognized on an ongoing basis for the agreed periodic service
fee. For as-needed basis, revenue is recognized when the contractual services have been completed. Procurement Service Fees The Company generates its revenue from
service fees by providing procurement services for sourcing, accounts receivables financing, and logistics services relating to auto parts
and accessories on an as needed basis. The transaction price is determined when the customer places an order with the Company. The Company
recognizes revenue when the procured goods have been transferred to and accepted by the customers as its performance obligation is completed. Supply Chain Management Platform Service Fee The Company generates platform fees
through its supply chain management platform service. The transaction price is determined based on a percentage of the aggregate amounts
of purchase payments to our partnered auto parts suppliers. The Company recognizes revenue when the procured auto parts have been transferred
to and accepted by the customers as the Company’s performance obligation is completed.
m) Fair Value of Financial Instruments The accounting standard for fair value
establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under the provisions of the pronouncement,
fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”)
in an orderly transaction between market participants at the measurement date. ASC 820 establishes a hierarchy for
inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring
that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the
asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that
reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed
based on the best information available in the circumstances. The hierarchy is described below: Level 1: Quoted prices (unadjusted)
in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority
to Level 1 inputs. Level 2: Observable prices
that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs
are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The Company’s current financial
assets and liabilities approximate fair value due to their short-term nature and include cash accounts. The Company’s borrowings
approximate fair value as the rates of interest are similar to what they would receive from other financial institutions. The
following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized
using the fair value hierarchy:
Carrying Amount Estimated
Level 1 Level 2 Level 3 Fair Value
March 31, 2021
Assets
Carried at (amortized) cost:
Corporate debt securities - - 5,073,548 5,073,548
Related party investment -wealth management product - - 3,966,476 3,966,476
March 31, 2020
Assets
Carried at (amortized) cost:
Corporate debt securities - - 5,587,984 5,587,984
Related party investment -wealth management product - - 3,378,706 3,378,706
n) Advertising Advertising costs are expensed as incurred
as selling expenses. Advertising expenses were $3,343,935, $0, and $931 for the years ended March 31, 2021, 2020, and 2019, respectively.
o) Income Taxes Income taxes have been determined using
the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences
expected to occur when the reported amounts of assets and liabilities are recovered or paid. Deferred taxes result from differences between
the financial statement and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax
laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a
tax benefit will not be realized. The assessment of whether or not a valuation allowance is required often requires significant judgment.
p) Loss Per Common Share Basic and diluted net loss per share
is presented in conformity with ASC Topic 260, Earnings per Share, for all periods presented. In accordance with this guidance, basic
and diluted net loss per share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares
outstanding during the period. In a period where there is a net loss position, diluted weighted average shares are the same as basic weighted
average shares. Shares used in the diluted net loss per common share calculation exclude potentially dilutive share equivalents as the
effect would be antidilutive.
q) Comprehensive Income
(Loss) Comprehensive
income/(loss) refers to revenue, expenses, gains and losses that under U.S. GAAP are included in comprehensive income/(loss), but are
excluded from net loss as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other
comprehensive loss is comprised of foreign currency translation adjustments.
r) Segment Reporting Operating
segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the “CODM”),
which is comprised of certain members of the Company’s management team. The Company had three operating and reportable segments
during the periods presented as set out in Note 13.
s) Commitments and Contingencies In
the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business,
that cover a wide range of matters. Liabilities for the contingencies are recorded when it is probable that a liability has been incurred
and the amount of the liability can be reasonably estimated. Certain
conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but
which will only be resolved when one or more future events occur or fail to occur. The Company assesses these contingent liabilities,
which inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company
or unasserted claims that may result in legal proceedings, the Company, in consultation with its legal counsel, evaluates the perceived
merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be
sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount
of the liability can be estimated, the estimated liability would be accrued in the consolidated financial statements. If the assessment
indicates that a potentially material loss contingency is not probable, or is probable but cannot be estimated, the nature of the contingent
liability, together with an estimate of the range of the reasonably possible loss, if determinable and material, would be disclosed. Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee
would be disclosed.
t) Recent Accounting Pronouncements In
June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326) — Measurement of
Credit Losses on Financial Instruments.” This ASU amends several aspects of the measurement of credit losses on certain
financial instruments, including replacing the existing incurred credit loss model and other models with the Current Expected Credit
Losses (CECL) model and amending certain aspects of accounting for purchased financial assets with deterioration in credit quality
since origination. The Company adopted this guidance effective April 1, 2020, prospectively, and the adoption of this standard did
not have a material impact to the Consolidated Financial Statements. In
December 2019, the FASB issued Accounting Standard Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying
the Accounting for Income Taxes” (“ASU 2019-12”), which simplifies the accounting for income taxes. ASU 2019-12 is
effective for fiscal years beginning after December 15, 2020, including applicable interim periods. The Company adopted this guidance effective
April 1, 2020 and the adoption of this standard did not have a material impact to the Consolidated Financial Statements. In
March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform
on Financial Reporting |
