| Summary of Significant Accounting Policies | 2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements are prepared
in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include
the financial statements of Leader Capital Holdings Corp. and its wholly owned subsidiaries. Intercompany accounts and transactions
have been eliminated in consolidation. The Company has adopted August 31 as its fiscal year end. Going concern The accompanying consolidated financial statements
have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and
commitments in the normal course of business. The Company has suffered recurring losses from
operations, and records an accumulated deficit of $1,464,746 as of August 31, 2019. These conditions raise substantial doubt about
the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company’s
profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they become due. The Company expects to finance its operations
primarily through cash flow from operations, loans from existing directors and shareholders and placements of capital stock for
additional funding. In the event that the Company requires additional funding to finance the growth of the Company’s current
and expected future operations as well as to achieve our strategic objectives, a shareholder has indicated the intent and ability
to provide additional financing. No assurance can be given that any future financing, if needed, will be available or, if available,
that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed,
it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stock
holders, in the case of equity financing. These consolidated financial statements do
not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities
that might be necessary should the Company be unable to continue as going concern. Use of estimates The preparation of these consolidated financial
statements in conformity with U.S. GAAP requires management of the Company to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an on-going basis, the Company evaluates
its estimates based on historical experience and on various other assumptions that are believed to be reasonable 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. Actual results may differ from these estimates under different assumptions or conditions. Identified
below are the accounting policies that reflect the Company’s most significant estimates and judgments, and those that the
Company believes are the most critical to fully understanding and evaluating its consolidated financial statements. 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 expenses 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. The Company capitalizes 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. On September 1, 2018, the Company appointed
LOC Weibo Co., Ltd (“LOC”), an unrelated company incorporated in Taiwan, to develop a mobile application in four stages
for a total consideration of TWD20,000,000 ($651,466), payable in the form of common shares of the Company. As of August 31, 2019,
the first and second stages of development for the basic functions of the mobile application have been completed, and the Company
has issued a total of 908,678 of restricted common shares in aggregate at $0.50 per share for the work completed up to August 31,
2019. The Company has expensed $454,339 development costs for the first and second development stage in general and administrative
expenses for the year ended August 31, 2019. As of August 31, 2019, the development of the mobile application is still under progress
and thus the Company did not capitalize any cost of development. Revenue recognition The Company adopted Accounting Standards Update
(ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which establishes principles for reporting information about
the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods
or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services
to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods
or services recognized as performance obligations are satisfied. The Company recognizes revenues following the
five-step model prescribed under ASU No. 2014-09:
Step 1: Identify the contract
Step 2: Identify the performance obligations
Step 3: Determine the transaction price
Step 4: Allocate the transaction price
Step 5: Recognize revenue Revenues are recognized when control of the
promised goods or services is transferred to the Company’s customers, which may occur at a point in time or over time depending
on the terms and conditions of the agreement, in an amount that reflects the consideration we expect to be entitled to in exchange
for those goods or services. The Company signed an agreement with a third
party whereby the Company authorizes the third party to use the Company’s investment platform and related applications for
a period until December 31, 2020. Income from provision of investment platform services with the use of the Company’s mobile
applications is recognized when the service is performed. Revenue
by recognition over time vs point in time
Year ended August 31,
2019 2018
Revenue by recognition over time $ 11,111 $ -
Revenue by recognition at a point in time 7,000 -
$ 18,111 $ - Other Income-Related Party Revenue from subletting of leasehold land and
buildings are recognized on a straight-line basis over the lease term when collectability is reasonably assured and the tenant
has taken possession or controls the physical use of the leased assets. The Company leased its commercial office in Taipei from
April 1, 2018 to February 28, 2019 under non-cancelable operating leases with terms of 31 months to a related party which is Greenpro
LF Limited, a Seychelles company, owned by Mr. Lin Yi-Hsiu, the director of the Company and Mr. Lee Chong Kuang. Practical expedients and exemption The Company had not occurred any costs to obtain
contracts, and do not disclose the value of unsatisfied performance obligations for contracts with an original expected length
of one year or less. 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 fixtures 3
Office equipment 3
Leasehold improvements 3 Intangible asset Intangible assets are recorded at cost less
accumulated amortization with no residual value. Amortization of intangible assets is computed using the straight-line method over
their estimated period of benefit which is 5 years. Impairment of long-lived assets The Company reviews the carrying values of
long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value 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.
The Company fully impaired its intangible assets for the year ended August 31, 2018. No impairment has been recorded by the Company
for the year ended August 31, 2019. Income taxes Income taxes are determined using an asset
and liability method 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 did not have significant unrecognized
uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of and
for the years ended August 31, 2019 and 2018. 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.”
Year ended August 31,
2019 2018
Net loss $ (902,094 ) $ (541,239 )
Weighted average number of common shares outstanding - Basic and diluted 104,850,604 102,843,944
Net loss per share - Basic and diluted $ (0.01 ) $ (0.01 ) 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$”) respectively, and Hong Kong Dollars is also
the functional currency as being the primary currency of the economic environment in which the entity operates. In general, for consolidation purposes, assets
and liabilities of its subsidiary whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic
830-30, “ Translation of Financial Statement Translation of amounts from HK$ into US$1 has
been made at the following exchange rates for the respective periods:
As of and for the As of and for the
Year-end / average HK$ : 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, deposits, notes receivable, accounts payable and accrued liabilities, balances due to a
director and bonds payable approximate at their fair values because of the short-term nature of these financial instruments or
the rate of interest of these instruments approximate the market rate of interest. 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 February 2016, the FASB issued ASU 2016-02,
“Leases (Topic 842)” and issued certain transitional guidance and subsequent amendments between January 2018 and March
2019 within ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, including ASU 2016-02, “ASC
842”). ASU 2016-02 creates a new topic in ASC 842 “Leases” to replace the current topic in ASC 840 “Leases,”
which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the consolidated
balance sheets and disclosing key information about leasing arrangements. ASC 842 affects both lessees and lessors, although for
the latter the provisions are similar to the current model, but are updated to align with certain changes to the lessee model and
also the new revenue recognition provisions contained in ASC 606. The new guidance is effective for the Company for the year ending
August 31, 2020 and interim reporting periods during the year ending August 31, 2020. Management expects the primary impact to
the Company’s consolidated financial position upon adoption will be the recognition, on a discounted basis, of its minimum
commitments under noncancelable operating leases on its consolidated balance sheets resulting in the recording of right of use
assets and lease obligations. On June 20, 2018, the FASB issued ASU No.
2018-07, Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting, which
aligns the accounting for share-based payment awards issued to employees and nonemployees. Under ASU No. 2018-07, the existing
employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of
financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards
will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will
be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. The new standard is effective
for the Company on September 1, 2019. Early adoption is permitted, including in interim periods, and should be applied to all
new awards granted after the date of adoption. The Company does not expect this guidance will have a material impact on its consolidated
financial statements. |
