| SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES | NOTE
2 – SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES The
Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness
of accounting policies and their application. Critical accounting policies and practices are those that are both most important
to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective,
or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.
The Company’s significant and critical accounting policies and practices are disclosed below as required by United States
generally accepted accounting principles (“US GAAP”). Basis
of Presentation The
Company’s condensed consolidated financial statements have been prepared in accordance with US GAAP. for interim financial
information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all
of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are
of a normal recurring nature. These financial statements should be read in conjunction with the financial statements for the year
ended December 31, 2019 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with
the Securities and Exchange Commission (the “SEC”) on June 30, 2020. The results of operations for the six months
ended June 30, 2020, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31,
2020. Common
Control The
transactions between the Company and Migom Bank and Central, which all three are under common control, resulted in a change in
reporting entity and required retrospective combination of the entities for all periods presented, as if the combination had been
in effect since the inception of common control. Accordingly, the consolidated financial statements of the Company reflect the
accounting of the combined acquired subsidiaries at historical carrying values, except that equity reflects the equity of Migom
Global. Principles
of Consolidation The
accompanying unaudited consolidated financial statements include all of the accounts of Migom Globa Corp. and its wholly owned
subsidiaries, Migom Bank and Central. All significant intercompany transactions and balances have been eliminated in consolidation. Development
Stage Company The
Company is a development stage company as defined in ASC 915 “Development Stage Entities.”. The Company is devoting
substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses
accumulated since inception have been considered as part of the Company’s development stage activities. The
Company has elected to adopt application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination
of Certain Financial Reporting Requirements. Upon adoption, the Company no longer presents or discloses inception-to-date information
and other remaining disclosure requirements of Topic 915. Use
of Estimates and Assumptions and Critical Accounting Estimates and Assumptions 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(s) of the financial statements and the reported amounts of revenues and expenses
during the reporting period(s). Critical
accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and
judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact
of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimate(s)
and assumption(s) affecting the financial statements was (were): (i) (ii) These
significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached
to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management
bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the
financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from other sources. Management
regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes
in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those
estimates are adjusted accordingly. Actual
results could differ from those estimates. Fair
Value Measurements The
Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value
as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair
value measurements. ASC
820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price)
in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may
be used to measure fair value: Level
1 — quoted prices in active markets for identical assets or liabilities Level
2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level
3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The
carrying amounts of the Company’s financial assets and liabilities, such as cash, accrued expenses, related party payables
and notes payable approximate their fair values because of the short maturity of these instruments. Cash
and Cash Equivalents The
Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
The cash held by related party is not insured. The Company has not experienced losses in such accounts. Fixed
Assets Fixed
assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged
to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life of five
to ten years. Upon the sale or retirement of property and equipment, the related cost and accumulated depreciation are removed
from the accounts and any gain or loss is reflected in consolidated statements of operations. Intangible
Assets Costs
incurred to acquire intangibles are capitalized when the Company believes that there is a high likelihood that the software will
be utilized and there will be future economic benefit associated with the software. These costs will be amortized on a straight-line
basis over a 7 years life from the date of acquisition. In
accordance with the provisions of the applicable authoritative guidance, the Company’s long-lived assets and amortizable
intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may
not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be
recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment
share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair
value to the carrying value. The amortization of the trademark was not significant for the period ended June 30, 2020. Related
Parties The
Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure
of related party transactions. Pursuant
to Section 850-10-20 the related parties include (a) affiliates of the Company (“Affiliate” means, with respect to
any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled
by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act);
(b) entities for which investments in their equity securities would be required, absent the election of the fair value option
under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing
entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship
of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may
deal if one party controls or can significantly influence the management or operating policies of the other to an extent that
one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can
significantly influence the management or operating policies of the transacting parties or that have an ownership interest in
one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties
might be prevented from fully pursuing its own separate interests. The
financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense
allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated
in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall
include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to
which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such
other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the
dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change
in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties
as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Commitment
and Contingencies The
Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain
conditions may exist as of the date the 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 such contingent liabilities,
and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings
that are pending against the Company or unasserted claims that may result in such proceedings, the Company 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, then the estimated liability would be accrued in the Company’s financial statements. If the assessment
indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be
estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material,
would be disclosed. Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would
be disclosed. Management does not believe, based upon information available at this time that these matters will have a
material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance
that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations
or cash flows. The
Company did not have any commitments or contingencies as of June 30, 2020. Impairment
of Long-lived Assets The
Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s
long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes
in circumstances indicate that the carrying amount of the asset may not be recoverable. The
Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated
with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective
carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair
value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.
If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than
originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated
useful lives. The
Company determined that there were no impairments of long-lived assets at December 31, 2019 and June 30, 2020. 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 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 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. It
develops and holds rights to essential software products and other intellectual property vital for operations of the companies,
which it owns. Such intellectual property will be licensed to other companies in the financial industry either under Migom brand
or white-labeled. As a stand-alone company, Migom Global Corp. intends to manage and operate as the proprietor of the closed-loop
payment and global money transfer system, which will operate both on the rails of Migom Bank and licensed to other financial institutions.
Additionally, Migom Global Corp. intends to provide advisory services to government institutions and large private companies in
the fields of innovative fintech and blockchain technologies and application of the same to various industries. Income
Taxes Income
taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded
for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and liabilities. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes
in tax laws and rates on the date of enactment. Earnings Per Share Basic earnings per common share is computed
by dividing net earnings attributable to common shareholders by the weighted-average number of common shares outstanding during
the period. Diluted earnings per share is computed by dividing net income attributable to common shareholders by the sum of the
weighted average number of common stock outstanding and dilutive potential common stock during the period. Diluted earnings per share considers the
impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common
shares would have an anti-dilutive effect. Foreign
Currency Translation and Transactions The
Hong Kong Dollar (“HKD”) is the functional currency of Central whereas the financial statements are reported in United
States Dollar (“USD,” “$”). Assets and liabilities are translated based on the exchange rates at the balance
sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity
accounts are translated at historical exchange rates. The resulting translation gain and loss adjustments are accumulated as a
component of stockholders’ equity and other comprehensive loss. The
East Caribbean Dollar (“ECD”) is the functional currency of Migom Bank whereas the financial statements are reported
in United States Dollar (“USD,” “$”). Assets and liabilities are translated based on the exchange rates
at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the
period. Equity accounts are translated at historical exchange rates. The resulting translation gain and loss adjustments are accumulated
as a component of stockholders’ equity and other comprehensive loss. Comprehensive
Income/Loss The
Company reports comprehensive loss and its components in its financial statements. Comprehensive loss consists of net loss on
foreign currency translation adjustments affecting stockholders’ equity that, under U.S. GAAP, are excluded from net loss.
● Central
o As
of June 30, 2020, the exchange rate between U.S. Dollars and Hong Kong Dollar was US$1.00 = HKD7.7505, and the weighted average
exchange rate for the period of January 1, 2020 through June 30, 2020 was US$1.00 =HKD7.7794.
o As
of December 31, 2019, the exchange rate between U.S. Dollars and Hong Kong Dollar was US$1.00 = HKD7.789, and the weighted
average exchange rate for the period of November 16, 2019 (inception) through December 31, 2019 was US$1.00 =HKD7.8065.
● Migom
Bank
o As
of June 30, 2020, the exchange rate between U.S. Dollars and East Caribbean Dollar was US$1.00 = ECD2.7, and the weighted
average exchange rate for the period of January 1, 2020 through June 30, 2020 was US$1.00 =ECD2.7.
o As
of December 31, 2019, the exchange rate between U.S. Dollars and East Caribbean Dollar was US$1.00 = ECD2.7, and the weighted
average exchange rate for the period of November 16, 2019 (inception) through December 31, 2019 was US$1.00 =ECD2.7. Cash
Flows Reporting The
Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash
receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions
of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25
of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile
it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and
payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income
that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign
currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on
cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash
and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts
or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification. Subsequent
Events The
Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent
events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant
to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued
when they are widely distributed to users, such as through filing them on EDGAR. Recently
Issued Accounting Pronouncements In
February 2016, FASB issued ASC 842 that requires lessees to recognize lease assets and corresponding lease liabilities on the
balance sheet for all leases with terms of more than 12 months. The update, which supersedes existing lease guidance, will continue
to classify leases as either finance or operating, with the classification determining the pattern of expense recognition in the
income statement. The
ASU will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted, and is
applicable on a modified retrospective basis with various optional practical expedients. The Company has assessed the impact of
this standard. The company’s current leases as of the balance sheet date do not fall under this guidance as they are month-to-month
leases. Management
does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material
effect on the accompanying financial statements. |
