| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE – 2 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES These accompanying consolidated financial
statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying
consolidated financial statements and notes.
Basis
of presentation These accompanying consolidated financial
statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.
GAAP”).
Use
of estimates In preparing these consolidated financial
statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance
sheet and revenues and expenses during the period and years reported. Actual results may differ from these estimates.
Basis
of consolidation The consolidated financial statements include
the financial statements of VIVC and its subsidiaries. All significant inter-company balances and transactions within the Company
have been eliminated upon consolidation.
Cash
and cash equivalents Cash and cash equivalents consist primarily
of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily
convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair
value due to the short maturities of these instruments.
Property,
plant and equipment Property, plant and equipment are stated at
cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line
basis over the following expected useful lives from the date on which they become fully operational and after taking into account
their estimated residual values:
Expected useful life
Service yacht 10 years
Motor vehicle 5 years Expenditure for repairs and maintenance is
expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts
and any resulting gain or loss is recognized in the results of operations.
Revenue
recognition The Company adopted Accounting Standards Update
(“ASU”) 2014-09, Revenue from Contracts with Customers Under ASU 2014-09, the Company recognizes
revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration
the Company expects to be entitled to in exchange for those goods or services. The Company derives its revenues from the
sale and rendering of yacht services and recognizes in full upon completion of delivery to the receiver’s location or services
to the customers. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized
as it fulfills its obligations under each of its agreements:
• identify the contract with a customer;
• identify the performance obligations
in the contract;
• determine the transaction price;
• allocate the transaction price to performance
obligations in the contract; and
• recognize revenue as the performance
obligation is satisfied.
Comprehensive
income Accounting Standards Codification (“ASC”)
ASC Topic 220, “Comprehensive Income”
Income
taxes Income taxes are determined in accordance
with the provisions of ASC Topic 740, “Income Taxes ASC 740 prescribes a comprehensive model for
how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or
expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when
it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially
and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon
ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For the period ended December 31, 2019 and
the years ended April 30, 2019 and 2018, the Company did not have any interest and penalties associated with tax positions. As
of December 31, 2019, April 30, 2019 and 2018, the Company did not have any significant unrecognized uncertain tax positions.
Foreign
currencies translation 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 consolidated statement of operations. The reporting currency of the Company is United
States Dollar ("US$") and the accompanying consolidated financial statements have been expressed in US$. In addition,
the Company and subsidiaries are operating in PRC and Hong Kong maintain their books and record in their local currency, Renminbi
(“RMB”) and Hong Kong dollars (“HK$”), which is a functional currency as being the primary currency of
the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities
of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “
Translation of Financial Statement Translation of amounts from RMB and HK$ into
US$ has been made at the following exchange rates for the period ended December 31, 2019 and the years ended April 30, 2019 and
2018:
December 31, April 30,
2019 2019 2018
Period-end RMB:US$ exchange rate 6.9668 6.9668 6.8764
Period average RMB:US$ exchange rate 6.9668 6.9668 6.6146
Period-end HK$:US$ exchange rate 7.7872 7.7872 7.8312
Period average HK$:US$ exchange rate 7.8346 7.8346 7.8370
Leases The Company adopted Topic 842, Leases Leases At the inception of an arrangement, the Company
determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term
greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities.
The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities
and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining
lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease
payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes
its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount
equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842,
components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components
(e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the
fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective
relative fair values to the lease components and non-lease components. The Company made the policy election to not
separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together
as a single component.
Net
income per share The Company calculates net income per share
in accordance with ASC Topic 260, “Earnings per Share.”
· Retirement plan costs Contributions to retirement plans (which are
defined contribution plans) are charged to general and administrative expenses in the accompanying consolidated statements of
operation as the related employee service is provided.
· Segment reporting ASC Topic 280, “ Segment Reporting
Related
parties Parties, which can be a corporation or individual,
are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operational decisions. Companies are also considered to be related if they
are subject to common control or common significant influence.
Concentrations
and credit risk The Company’s principal financial instruments
subject to potential concentration of credit risk are cash and cash equivalents, including amounts held in money market accounts.
The Company places cash deposits with a federally insured financial institution. The Company maintains its cash at banks and financial
institutions it considers to be of high credit quality; however, the Company’s domestic cash deposits may at times exceed
the Federal Deposit Insurance Corporation’s insured limit. Balances in excess of federally insured limitations may not be
insured. The Company has not experienced losses on these accounts, and management believes that the Company is not exposed to
significant risks on such accounts.
Fair
value of financial instruments The carrying value of the Company’s
financial instruments (excluding finance lease): cash and cash equivalents, accounts receivable, amount due to a related party,
accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their
fair values because of the short-term nature of these financial instruments. Management believes, based on the current
market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate
the carrying amount. The Company also follows the guidance of the
ASC Topic 820-10, “ Fair Value Measurements and Disclosures
● Level 1
● Level 2 :
● Level 3 Fair value estimates are made at a specific
point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions
could significantly affect the estimates.
Recent
accounting pronouncements From time to time, new accounting pronouncements
are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the
Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued
standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Accounting Standards Adopted In February 2016, the FASB issued ASU 2016-02,
Leases (“ASU 2016-02”) in order to increase transparency and comparability among organizations by recognizing right-of-use
assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous generally accepted
accounting principles. ASU 2016-02 requires a lessee to recognize a lease liability for future lease payments and a right-of-use
asset representing the right to use the underlying asset for the lease term on the balance sheet for most lease arrangements.
The new standard also changes many key definitions, including the definition of a lease. The new standard includes a short-term
lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election
not to recognize right-of-use assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously
referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous
guidance in ASC 840. ASU 2016-02 is effective for fiscal years
beginning after December 15, 2018 (including interim periods within those periods) and early adoption is permitted. In August
2018, the FASB issued ASU 2018-11, Leases, Targeted Improvements, which provides a new transition option in which an entity
initially applies ASU 2016-02 at the adoption date and recognizes a cumulative-effect adjustment in the period of adoption. Prior
period comparative balances will not be adjusted. The Company used the new transition option and was also utilizing the package
of practical expedients that allows it to not reassess: (1) whether any expired or existing contracts are or contain leases, (2)
lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. We also used the
short-term lease exception for leases with a term of 12 months or less. Additionally, the Company used the practical expedient
that allowed each separate lease component of a contract and the associated non-lease components to be treated as a single lease
component. The exercise of lease renewal options is at our discretion and the renewal to extend the lease terms are not included
in the Company’s Right-Of-Use assets and lease liabilities as they are not reasonably certain of exercise. The Company will
evaluate the renewal options and when they are reasonably certain of exercise, the Company will include the renewal period in
its lease term. As of the January 1, 2019, effective date the Company identified one finance lease arrangement in which it is
a lessee. In calculating the present value of the lease
payments, the Company applied an individual discount rate for each of its leases, and determined the appropriate discount rate
based on the remaining lease terms at the date of adoption. As the lessee to several lease agreements, the Company did not have
insight into the relevant information that would be required to arrive at the rate implicit in the lease. Therefore, the Company
utilized its outstanding borrowings as a benchmark to determine the incremental borrowing rate for its leases. The benchmark rate
was adjusted to arrive at an appropriate discount rate for each lease. In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock
Compensation: Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which expands the scope
of Compensation – Stock Compensation (“Topic 718”) to include share-based payment transactions for
acquiring goods and services from nonemployees. This amendment applies to all share-based payment transactions in which a grantor
acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The
Company adopted ASU 2018-07 on January 1, 2019. The impact was immaterial to the financial statements. In June 2018, the FASB issued ASU No. 2018-08, Not-For-Profit
Entities – Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made (“ASU
2018-08”). ASU 2018-08 clarifies how an entity determines whether a resource provider is participating in an
exchange transaction by evaluating whether the resource provider is receiving commensurate value in return for the resources transferred.
The guidance is effective for annual periods beginning after June 15, 2018, including interim periods within those annual periods,
and has been adopted on a modified prospective basis. The modified prospective adoption is applied to agreements that are not
completed as of the effective date, or entered into after the effective date. Under the modified prospective adoption approach,
prior period results have not been restated and no cumulative-effect adjustment has been recorded. The Company does not expect
this standard to have a material impact on its financial statements. Accounting Standards Issued, Not Adopted In June 2016, the FASB issued ASU No.
2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial
Instruments (“ASU 2016-13”). This ASU requires measurement and recognition of expected credit losses for
financial assets. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and
available-for-sale debt securities. ASU 2016-13 is effective for the Company beginning January 1, 2023. Entities will apply
the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting
period in which the guidance is adopted. The Company is currently evaluating the potential effect of this standard on its
financial statements. The Company does not expect this standard to have a material impact on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair
Value Measurement (“ASU 2018-13”), which eliminates, adds and modifies certain disclosure requirements for fair value
measurements. The amendment is effective for interim and annual reporting periods beginning after December 15, 2019. The Company
is currently assessing the impact this will have on the financial statements. In November 2018, the FASB issued ASU No.
2018-18, Collaborative Arrangements (“ASU 2018-18”), which clarifies the interaction between ASC 808, Collaborative
Arrangements and ASC 606, Revenue from Contracts with Customers. Certain transactions between participants in a collaborative
arrangement should be accounted for under ASC 606 when the counterparty is a customer. In addition, ASU 2018-18 precludes an entity
from presenting consideration from a transaction in a collaborative arrangement as revenue if the counterparty is not a customer
for that transaction. ASU 2018-18 should be applied retrospectively to the date of initial application of ASC 606. This guidance
is effective for interim and fiscal periods beginning after December 15, 2019. The Company is currently assessing the impact this
will have on the financial statements. In December 2019, the FASB issued ASU No.
2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain
exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim
period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects
of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that
result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years and interim periods within those
fiscal years beginning after December 15, 2020, with early adoption permitted. Adoption of the standard requires certain changes
to be made prospectively, with some changes to be made retrospectively. The Company does not expect the adoption of this standard
to have a material impact on our financial position, results of operations or cash flows. |
