| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE－3 SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES The accompanying condensed consolidated financial
statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying
condensed consolidated financial statements and notes.
Use
of estimates In preparing these condensed 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 periods reported. Actual results may differ from these estimates.
Risks
and Uncertainties
(1) The
Company’s auditors have issued a going concern opinion. This means that there is substantial
doubt that the Company can continue as an ongoing business for the next twelve months if
the Company does not generate more revenues or obtain more funds for its business operations.
There is no assurance that the Company can generate more revenues or obtain more investments.
(2) The
Company faces strong competition from well-established companies and small independent companies.
The Company will be at a competitive disadvantage in obtaining the facilities, employees,
financing and other resources required to provide its services and products to customers.
The Company’s opportunity to obtain customers may be limited by its financial resources
and other assets.
(3) The
Company relies on the health and growth of the tourism industry. Tourism is highly sensitive
to business and personal discretionary spending levels, and thus tends to decline during
general economic downturns. In addition, other adverse trends or events that tend to reduce
tourism are likely to reduce our revenues. Also, due to the nature of its business, the Company
may be subject to liability claims arising out of accidents or disasters causing injury to
its customers, including claims for serious personal injury or death. There can be no assurance
that the Company will be able to obtain sufficient insurance coverage at acceptable premium
levels in the future. Successful assertion against one or a series of large uninsured claims,
or of one or a series of claims exceeding our insurance, could adversely affect its business,
financial condition and results of operations.
(4) The
Company has a trademark in China and will continue the process of applying trademarks in
Taiwan and US. There is no assurance that the trademark registration can be obtained timely.
(5) The
Company is unable to afford establishing an audit committee due to limited operations and
lack of revenue.
(6) As
a Nevada corporation, the Company plans to be able to carry out business in the United States
eventually. However, currently we don’t have any substantial asset in the U.S. and
we may not be able to own any substantial asset in the near future. Lack of substantial assets
will make it difficult for us to launch business operations and cause delay to the execution
of our business plans in the U.S.
(7) The
Company has not used a private placement memorandum, a registered stock offering or any other
type of formal disclosure connected with prior sales of securities. Therefore, there is risk
that investors might seek to reverse prior purchase transactions and ask for a return of
their money.
Basis
of consolidation The condensed 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.
Accounts
receivable Accounts receivable are recorded at
the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion
of service. Credit is extended based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment
history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90
days and over a specified amount are reviewed individually for collectibility. At the end of fiscal year, the Company specifically evaluates
individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection
of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability
of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate
actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged
off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The
Company does not have any off-balance-sheet credit exposure related to its customers. As of September 30, 2021 and December 31, 2020,
there was no allowance for doubtful accounts.
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
Office equipment 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 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 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. The Company is subject to tax in local
and foreign jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the
relevant tax authorities.
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 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 September 30, 2021 and December 31, 2020:
September 30, 2021 December 31, 2020
Period/year-end RMB:US$ exchange rate 6.4567 6.5276
Period/annual average RMB:US$ exchange rate 6.4694 6.9001
Period/year-end HK$:US$ exchange rate 7.7864 7.7525
Period/annual average HK$:US$ exchange rate 7.7665 7.7557
Period/year-end TWD:US$ exchange rate 27.8220 28.0772
Period/annual average TWD:US$ exchange rate 27.9557 29.4418
Lease 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.
Noncontrolling
interest The Company accounts for noncontrolling
interest in accordance with ASC Topic 810-10-45, which requires the Company to present noncontrolling interests as a separate component
of total shareholders’ equity on the consolidated balance sheets and the consolidated net loss attributable to the its noncontrolling
interest be clearly identified and presented on the face of the consolidated statements of operations and comprehensive loss.
Net
loss per share The Company calculates net loss per
share in accordance with ASC Topic 260, “ Earnings per Share
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 short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable,
prepayments and other receivables, 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 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 In December 2019, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, “ Simplifying the Accounting
for Income Taxes. In January 2020, the FASB issued ASU
2020-01, “ Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 The Company has reviewed all recently
issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected
to cause a material impact on its financial condition or the results of its operations. |
