| Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements for Leader
Capital Holdings Corp. and its subsidiaries are prepared in accordance with accounting principles generally accepted in the United
States of America (“US GAAP”) and include the accounts of Leader Capital Holdings Corp. and its wholly owned subsidiaries,
Leader Financial Group Limited and JFB Internet Service Limited. Intercompany accounts and transactions have been eliminated in
consolidation. The Company has adopted August 31 as its fiscal year end. Use of estimates Management uses estimates and assumptions in
preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and
expenses during the periods reported. Actual results may differ from these estimates. Cash and cash equivalents Cash and cash equivalents are carried at cost
and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments
with an original maturity of three months or less as of the purchase date of such investments. Software Development Costs The Company expense software development costs,
including costs to develop software products or the software component of products to be marketed to external users, before technological
feasibility is reached. Technological feasibility is typically reached shortly before the release of such products and as a result,
development costs that meet the criteria for capitalization were not material for the periods presented. We capitalize development costs related to
these software applications once the preliminary project stage is complete and it is probable that the project will be completed
and the software will be used to perform the function intended. Costs capitalized for developing such software applications were
not material for the periods presented. Plant and equipment 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:
Expected useful life
Furniture and fixture 3
Leasehold improvement 3 Intangible asset All of our intangible assets are subject to
amortization and are amortized using the straight-line method over their estimated period of benefit which is 5 years. The Company follows ASC Topic 350 in accounting
for intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. There was no impairment losses
recorded on intangible assets for the period ended February 28, 2018. 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 conducts major businesses in Hong
Kong. The Company is subject to tax in Hong Kong jurisdictions. As a result of its business activities, the Company will file tax
returns that are subject to examination by the Hong Kong tax authority. Net income/(loss) per share The Company calculates net income/(loss) per
share in accordance with ASC Topic 260, “Earnings per Share.” 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
statements of operations. The reporting currency of the Company is United
States Dollars (“US$”). The Company’s subsidiary in Seychelles and Hong Kong maintains its books and record in
United States Dollars (“US$”) and Hong Kong Dollars (“HK$”) respectively, and Hong Kong Dollars is functional
currency as being the primary currency of the economic environment in which the entity operates. In general, for consolidation purposes, assets
and liabilities of its subsidiary whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic
830-30, “ Translation of Financial Statement Translation of amounts from HK$ into US$1 has
been made at the following exchange rates for the respective periods:
As of and for the period ended February 28, 2018 As of and for the period ended August 31, 2017
Year-end / average HK$ : US$1 exchange rate 7.80 7.80 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 operating decisions. Companies are also considered to be related if they
are subject to common control or common significant influence. Fair value of financial instruments: The carrying value of the Company’s financial
instruments: cash and cash equivalents, prepayment, deposits, accounts payable and accrued liabilities and amount due to a director
approximate at their fair values because of the short-term nature of these financial instruments. The Company also follows the guidance of the
ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets
and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the
inputs used in measuring fair value as follows: Level 1 Level 2 Level 3: Recent accounting pronouncements In May 2014, the Financial Accounting Standards
Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which
amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from
Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year.
The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. In March 2016, the FASB
issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations
(Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus agent considerations.
The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is
transferred to the customers. The new standard further requires new disclosures about contracts with customers, including the significant
judgments the company has made when applying the guidance. We will adopt the new standard effective January 1, 2018, using the
modified retrospective transition method. We finalized our analysis and the adoption of this guidance will not have a material
impact on our consolidated financial statements and our internal controls over financial reporting. In June 2014, the FASB issued Accounting Standards
Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting
Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation,” (“ASU 2014-10”).
ASU 2014-10 removes the definition of a development stage entity from the ASC, thereby removing the financial reporting distinction
between development stage entities and other reporting entities from GAAP. In addition, ASU 2014-10 eliminates the requirements
for development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and stockholders’
equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development
stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development
stage entity that in prior years it had been in the development stage. ASU 2014-10 is effective for annual reporting periods beginning
after December 15, 2014, and interim periods therein. Early adoption is permitted. The Company has elected to adopt ASU 2014-10
effective with this registration statement on Form S-1 and its adoption resulted in the removal of previously required development
stage disclosures. In October 2016, the FASB issued Accounting
Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other than Inventory (ASU 2016-16), which requires
companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory. This guidance
will be effective for us in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. We currently anticipate
adopting the new standard effective January 1, 2018, and do not expect the standard to have a material impact on our financial
statements. In November 2016, the FASB issued Accounting
Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include
amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period
and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective for us in the first quarter
of 2018 and early adoption is permitted. We are still evaluating the effect that this guidance will have on our financial statements
and related disclosures. 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. |
