| Accounting Policies, by Policy (Policies) | 9 Months Ended |
| Sep. 30, 2021 |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis
of Presentation The
accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United
States of America (“US GAAP”). The consolidated financial statements include the financial statements of the Company and
its wholly-owned subsidiaries. All significant inter-company transactions and balances between the Company and its subsidiaries are eliminated
upon consolidation. |
| Principles of Consolidation | Principles
of Consolidation The
consolidated financial statements include the accounts of Greenland Technologies Holding Corporation and its subsidiaries and have been
prepared in accordance with U.S. GAAP. Intercompany accounts and transactions
have been eliminated upon consolidation. Certain reclassifications to previously reported financial information have been made to conform
to the current period presentation. The
Business Combination was accounted for as a reverse recapitalization (the “Recapitalization Transaction”) in accordance with
Accounting Standard Codification (“ASC”) 805, Business Combinations. For accounting and financial reporting purposes, Zhongchai
Holding is considered the acquirer based on facts and circumstances, including the following:
● Zhongchai Holding’s
operations comprise the ongoing operations of the combined entity;
● The officers of the newly
combined company consist of Zhongchai Holding’s executives, including the Chief Executive Officer, Chief Financial Officer
and General Counsel; and,
● The former shareholders
of Zhongchai Holding own a majority voting interests in the combined entity. As
a result of Zhongchai Holding being the accounting acquirer, the financial reports filed with the SEC by the Company subsequent to the
Business Combination are prepared “as if” Zhongchai Holding is the predecessor and legal successor to the Company. The historical
operations of Zhongchai Holding are deemed to be those of the Company. Thus, the financial statements included in this report reflect
(i) the historical operating results of Zhongchai Holding prior to the Business Combination; (ii) the combined results of the Company
and Zhongchai Holding following the Business Combination in October 24, 2019; (iii) the assets and liabilities of Zhongchai Holding
at their historical cost, and (iv) Greenland’s equity structure for all periods presented. Zhongchai Holding received 7,500,000
shares of Greenland in exchange for all the share capital, which is reflected retroactively to December 31, 2017 and will be utilized
for calculating earnings per share in all prior periods. No step-up basis of intangible assets or goodwill was recorded in the Business
Combination transaction consistent with the treatment of the transaction as a reverse capitalization of Zhongchai Holding. |
| Use of Estimates | Use of
Estimates The
preparation of the consolidated financial statements in conformity with U.S. GAAP 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 of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates
using the best information available at the time the estimates are made. Actual results could differ from those estimates. Significant
estimates in the nine months ended September 30, 2021 and 2020 include allowance for doubtful accounts, reserve for inventories, useful
life of property, plant and equipment, assumptions used in assessing impairment of long-term assets and valuation of deferred tax assets
and accruals for taxes due. |
| Non-controlling Interest | Non-controlling
Interest Non-controlling
interests in the Company’s subsidiaries are recorded in accordance with the provisions of Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification 810 Consolidation (“ASC 810”) and are reported as a component of equity,
separate from the parent’s equity. Purchase or sale of equity interests that do not result in a change of control are accounted
for as equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results
of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with
any gain or loss recognized in earnings. |
| Foreign Currency Translation | Foreign
Currency Translation The
accompanying consolidated financial statements are presented in United States dollars (“US$” or “$”). The functional
currency of the Company is Renminbi (“RMB”). Transactions in foreign currencies are initially recorded at the
functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement
amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of operations.
For the nine months ended September 30,
2021 2020
Period end RMB: US$ exchange rate 6.4434 6.7896
Period average RMB: US$ exchange rate 6.4631 6.9885 The
RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. The
PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. |
| Cash and Cash Equivalents | Cash
and Cash Equivalents For financial reporting purposes, the Company
considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company
maintains its bank accounts in USA, PRC and Hong Kong Special Administrative Region (“SAR”). Balances at financial institutions
or state-owned banks within PRC and Hong Kong SAR are not covered by insurance. Restricted
Cash Restricted
cash represents amounts held by a bank as security for bank acceptance bills, as well as the financial product secured for the short-term
bank loan and therefore is not available for the Company’s use until such time as the bank acceptance notes and bank loans have
been fulfilled or expired, normally within a twelve-month period. Fair
Value of Financial Instruments The
Company applies the provisions of ASC 820, Fair Value Measurements and Disclosures
● Level 1—defined as
observable inputs such as quoted prices in active markets for identical assets or liabilities;
● Level 2—defined as
inputs other than quoted prices in active markets, that are either directly or indirectly observable; and
● Level 3—defined as
unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The
Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash, accounts receivable, notes receivable,
accounts payable, other payables and accrued liabilities, short-term bank loans, and notes payable. The
carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and other current assets and liabilities
approximate fair value because of the short-term nature of these items. The estimated fair values of short-term bank loans were not materially
different from their carrying value as presented due to the short maturities and that the interest rates on the borrowing approximate
those that would have been available for loans of similar remaining maturity and risk profile. As the carrying amounts are reasonable
estimates of the fair value, these financial instruments are classified within Level 1 of the fair value hierarchy. Accounts
Receivable Accounts
receivable are carried at net realizable value. The Company reviews its accounts receivable on a periodic basis and makes general and
specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual
receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history,
its current creditworthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. The Company
only grants credit terms to established customers who are deemed to be financially responsible. Credit periods to customers are within
60 days after customers received the purchased goods. If accounts receivable are to be provided for, or written off, they would be recognized
in the consolidated statement of operations within operating expenses. Balance of allowance of doubtful accounts was $1.00 million and
$1.08 million as of September 30, 2021 and December 31, 2020, respectively. Inventories Inventories
are stated at the lower of cost or net realizable value, which is based on estimated selling prices less any further costs expected to
be incurred for completion and disposal. Cost of raw materials is calculated using the weighted average method and is based on purchase
cost. Work-in-progress and finished goods costs are determined using the weighted average method and comprise direct materials, direct
labor and an appropriate proportion of overhead. As of September 30, 2021 and December 31, 2020, the Company had reserves for inventories
of $0 million and $0 million, respectively. The Company records inventory reserves for excess or obsolete inventories based upon assumptions
about our current and future demand forecasts. Advance
to Suppliers Advance
to suppliers represents interest-free cash paid in advance to suppliers for purchases of parts and/or raw materials. The balance of advance
to suppliers was $0.21 million and $0.45 million as of September 30, 2021 and December 31, 2020. Property,
Plant, and Equipment Property,
plant, and equipment are stated at cost less accumulated depreciation, and include expenditure that substantially increases the useful
lives of existing assets. Expenditures for repairs and maintenance, which do not extend the useful life of the assets, are expensed as
incurred. Depreciation
is provided over their estimated useful lives, using the straight-line method. Estimated useful lives are as follows:
Plant, buildings and improvements 20 years
Machinery and equipment 2~10 years
Motor vehicles 4 years
Office equipment 3~5 years
Fixtures and decorations 5 years When
assets are sold or retired, their costs and accumulated depreciation are eliminated from the consolidated financial statements and any
gain or loss resulting from their disposal is recognized in the period of disposition as an element of other income. The cost of maintenance
and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized. Land
Use Rights According
to the PRC laws, the government owns all the land in the PRC. Companies or individuals are authorized to possess and use the land only
through land use rights granted by the Chinese government. The land use rights granted to the Company are being amortized using the straight-line
method over the lease term of fifty years. Impairment
of Long-Lived Assets Long-lived
assets are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts
may not be recoverable in accordance with FASB ASC 360, “Property, Plant and Equipment”. In
evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the
use of the asset and eventual disposition in accordance with FASB ASC 360-10-15. To the extent that estimated future, undiscounted cash
inflows attributable to the asset, less estimated future, undiscounted cash outflows, are less than the carrying amount, an impairment
loss is recognized in an amount equal to the difference between the carrying value of such asset and its fair value. Assets to be disposed
of and for which there is a committed plan of disposal, whether through sale or abandonment, are reported at the lower of carrying value
or fair value less costs to sell. There
was no impairment loss recognized for the nine months ended September 30, 2021 and 2020. Lease ASC
842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance
lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount,
timing and uncertainty of cash flows arising from leasing arrangements. Leases that transfer substantially all of the benefits and risks
incidental to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of
an obligation at the inception of the lease. All other leases are accounted for as operating leases. A
sale-leaseback transaction occurs when an entity sells an asset it owns and immediately leases the asset back from the buyer. The seller
then becomes the lessee and the buyer becomes the lessor. under ASC 842, both parties must assess whether the buyer-lessor has obtained
control of the asset and a sale has occurred. The Company has determined that the leaseback
transaction that it entered in 2019 fails to qualify as a sale because control is not transferred to the buyer-lessor. Therefore, the
Company has classified the lease portion of the transaction as a finance lease whereby the Company continues to depreciate the assets
and recorded a financing obligation for the consideration received from the buyer-lessor, with an implicit interest rate of 4.0038%. |
| Restricted Cash | Restricted
Cash Restricted
cash represents amounts held by a bank as security for bank acceptance bills, as well as the financial product secured for the short-term
bank loan and therefore is not available for the Company’s use until such time as the bank acceptance notes and bank loans have
been fulfilled or expired, normally within a twelve-month period. |
| Fair Value of Financial Instruments | Fair
Value of Financial Instruments The
Company applies the provisions of ASC 820, Fair Value Measurements and Disclosures
● Level 1—defined as
observable inputs such as quoted prices in active markets for identical assets or liabilities;
● Level 2—defined as
inputs other than quoted prices in active markets, that are either directly or indirectly observable; and
● Level 3—defined as
unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The
Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash, accounts receivable, notes receivable,
accounts payable, other payables and accrued liabilities, short-term bank loans, and notes payable. The
carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and other current assets and liabilities
approximate fair value because of the short-term nature of these items. The estimated fair values of short-term bank loans were not materially
different from their carrying value as presented due to the short maturities and that the interest rates on the borrowing approximate
those that would have been available for loans of similar remaining maturity and risk profile. As the carrying amounts are reasonable
estimates of the fair value, these financial instruments are classified within Level 1 of the fair value hierarchy. |
| Accounts Receivable | Accounts
Receivable Accounts
receivable are carried at net realizable value. The Company reviews its accounts receivable on a periodic basis and makes general and
specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual
receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history,
its current creditworthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. The Company
only grants credit terms to established customers who are deemed to be financially responsible. Credit periods to customers are within
60 days after customers received the purchased goods. If accounts receivable are to be provided for, or written off, they would be recognized
in the consolidated statement of operations within operating expenses. Balance of allowance of doubtful accounts was $1.00 million and
$1.08 million as of September 30, 2021 and December 31, 2020, respectively. |
| Inventories | Inventories Inventories
are stated at the lower of cost or net realizable value, which is based on estimated selling prices less any further costs expected to
be incurred for completion and disposal. Cost of raw materials is calculated using the weighted average method and is based on purchase
cost. Work-in-progress and finished goods costs are determined using the weighted average method and comprise direct materials, direct
labor and an appropriate proportion of overhead. As of September 30, 2021 and December 31, 2020, the Company had reserves for inventories
of $0 million and $0 million, respectively. The Company records inventory reserves for excess or obsolete inventories based upon assumptions
about our current and future demand forecasts. |
| Advance to Suppliers | Advance
to Suppliers Advance
to suppliers represents interest-free cash paid in advance to suppliers for purchases of parts and/or raw materials. The balance of advance
to suppliers was $0.21 million and $0.45 million as of September 30, 2021 and December 31, 2020. |
| Property, Plant, and Equipment | Property,
Plant, and Equipment Property,
plant, and equipment are stated at cost less accumulated depreciation, and include expenditure that substantially increases the useful
lives of existing assets. Expenditures for repairs and maintenance, which do not extend the useful life of the assets, are expensed as
incurred. Depreciation
is provided over their estimated useful lives, using the straight-line method. Estimated useful lives are as follows:
Plant, buildings and improvements 20 years
Machinery and equipment 2~10 years
Motor vehicles 4 years
Office equipment 3~5 years
Fixtures and decorations 5 years When
assets are sold or retired, their costs and accumulated depreciation are eliminated from the consolidated financial statements and any
gain or loss resulting from their disposal is recognized in the period of disposition as an element of other income. The cost of maintenance
and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized. |
| Land Use Rights | Land
Use Rights According
to the PRC laws, the government owns all the land in the PRC. Companies or individuals are authorized to possess and use the land only
through land use rights granted by the Chinese government. The land use rights granted to the Company are being amortized using the straight-line
method over the lease term of fifty years. |
| Impairment of Long-Lived Assets | Impairment
of Long-Lived Assets Long-lived
assets are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying amounts
may not be recoverable in accordance with FASB ASC 360, “Property, Plant and Equipment”. In
evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the
use of the asset and eventual disposition in accordance with FASB ASC 360-10-15. To the extent that estimated future, undiscounted cash
inflows attributable to the asset, less estimated future, undiscounted cash outflows, are less than the carrying amount, an impairment
loss is recognized in an amount equal to the difference between the carrying value of such asset and its fair value. Assets to be disposed
of and for which there is a committed plan of disposal, whether through sale or abandonment, are reported at the lower of carrying value
or fair value less costs to sell. There
was no impairment loss recognized for the nine months ended September 30, 2021 and 2020. |
| Lease | Lease ASC
842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance
lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount,
timing and uncertainty of cash flows arising from leasing arrangements. Leases that transfer substantially all of the benefits and risks
incidental to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of
an obligation at the inception of the lease. All other leases are accounted for as operating leases. A
sale-leaseback transaction occurs when an entity sells an asset it owns and immediately leases the asset back from the buyer. The seller
then becomes the lessee and the buyer becomes the lessor. under ASC 842, both parties must assess whether the buyer-lessor has obtained
control of the asset and a sale has occurred. The Company has determined that the leaseback
transaction that it entered in 2019 fails to qualify as a sale because control is not transferred to the buyer-lessor. Therefore, the
Company has classified the lease portion of the transaction as a finance lease whereby the Company continues to depreciate the assets
and recorded a financing obligation for the consideration received from the buyer-lessor, with an implicit interest rate of 4.0038%. The Company leases premises for offices under
non-cancellable operating leases in current year. Operating lease payments are expensed over the term of lease using straight line method.
The Company’s offices leases have a 3 year term. Usually within four months prior to the expiration date of a lease, the Company
is required to notify the lessor and has a priority to continue renting the lease property if a lessor intends to lease property. The
lease itself does not have restriction or covenants. Any damage, if made by the lessee, to the property and equipment within the property
has to been fixed or reimbursed by the lessee. The Company does not have any leases entered into but which have not yet commenced. Under
the terms of the lease agreements, the Company has no legal or contractual asset retirement obligations at the end of the leases. |
| Revenue Recognition | Revenue
Recognition In
accordance with ASC Topic 606, “Revenue from Contracts with Customers”, the Company recognizes revenues when goods or services
are transferred to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those
goods or services. In determining when and how revenues are recognized from contracts with customers, the Company performs the following
five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement
of the transaction price; (iv) allocation of the transaction price to the performance obligations and (v) recognition of revenues
when (or as) the Company satisfies each performance obligation. The Company derives revenues from the processing, distribution and sale
of its products. The Company recognizes its revenues net of value-added taxes (“VAT”). The Company is subject to VAT which
had been levied at the rate of 17% on the invoiced value of sales until April 30, 2018, after which date the rate was reduced to 16%.
VAT rate was further reduced to 13% starting from April 1, 2019. Output VAT is borne by customers in addition to the invoiced value of
sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales. Revenues
are recognized at a point in time once the Company has determined that the customer has obtained control over the product. Control is
typically deemed to have been transferred to the customer when the performance obligation is fulfilled, usually at the time of customers’
acceptance or consumption, at the net sales price (transaction price) and each of the criteria under ASC 606 have been met. Contract
terms may require the Company to deliver the finished goods to the customers’ location or the customer may pick up the finished
goods at the Company’s factory. International sales are recognized when shipment clears customs and leaves the port. The
Company has adopted ASC 606 on January 1, 2018, using the transition method of Modified-Retrospective Method (“MRM”). The
adoption of ASC 606 had no impact on the Company’s beginning balance of retained earnings. The
Company’s contracts are all short-term in nature with a contract term of one year or less. Receivables are recorded when the Company
has an unconditional right to consideration. Contracts
do not offer any price protection, but allow for the return of certain goods if quality problem, which is standard warranty. The Company
product returns and recorded reserve for sales returns were minimal for the nine months ended September 30, 2021 and 2020. The total
rebates amount is accounting for around 0.11% and 0.51% of the total revenue of Greenland. The
following table sets forth disaggregation of revenue:
For the three months ended September 30, For the nine months ended September 30,
Major Product 2021 2020 2021 2020
Transmission boxes for Forklift 19,806,162 14,998,460 66,199,525 39,359,886
Transmission boxes for Non-Forklift (EV, etc.) and parts of transmission boxes 3,278,631 1,522,138 9,700,469 3,609,124
Total 23,084,793 16,520,598 75,899,994 42,969,010 |
| Cost of Goods Sold | Cost
of Goods Sold Cost
of goods sold consists primarily of material costs, freight charges, purchasing and receiving costs, inspection costs, internal transfer
costs, wages, employee compensation, amortization, depreciation and related costs, which are directly attributable to the production
of products. Write-down of inventory to lower of cost or net realizable value is also recorded in cost of goods sold. |
| Selling Expenses | Selling
Expenses Selling
expenses include operating expenses such as payroll and traveling and transportation expenses. |
| General and Administrative Expenses | General
and Administrative Expenses General
and administrative expenses include management and office salaries and employee benefits, depreciation for office facility and office
equipment, travel and entertainment, legal and accounting, consulting fees and other office expenses. |
| Research and Development | Research
and Development Research
and development costs are expensed as incurred and totaled approximately $1,372,215 and $564,204 for the three months ended September
30, 2021 and 2020, respectively. Research and development costs are expensed as incurred and totaled approximately $3,337,056 and $1,604,151
for the nine months ended September 30, 2021 and 2020, respectively. |
| Government subsidies | Government
subsidies Government
subsidies are recognized when there is reasonable assurance that the subsidy will be received and all attaching conditions will be complied
with. When the subsidy relates to an expense item, it is recognized as income over the periods necessary to match the subsidy on a systematic
basis to the costs that it is intended to compensate. Where the subsidy relates to an asset, it is recognized as other long-term liabilities
and is released to the statement of operations over the expected useful life in a consistent manner with the depreciation method for
the relevant asset. Total government subsidies recorded in the other long-term liabilities were $2.18 million and $2.34 million at September
30, 2021 and December 31, 2020, respectively. |
| Income Taxes | Income
Taxes The
Company accounts for income taxes following the liability method pursuant to FASB ASC 740 “Income Taxes”. Under this method,
deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and
liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company
records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not
that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized
in income in the period that includes the enactment date. The
Company also follows FASB ASC 740, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only
if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical
merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the
largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance
on recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.
As of September 30, 2021 and December 31, 2020, the Company did not have a liability for unrecognized tax benefits. It is the Company’s
policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively,
as necessary. The Company’s historical tax years will remain open for examination by the local authorities until the statute of
limitations has passed. |
| Value-Added Tax | Value-Added
Tax Enterprises
or individuals, who sell commodities, engage in repair and maintenance or import or export goods in the PRC are subject to a value added
tax in accordance with PRC Laws. The VAT standard rate had been 17% of the gross sale price until April 30, 2018, after which date the
rate was reduced to 16%. VAT rate was further reduced to 13% starting from April 1, 2019. A credit is available whereby VAT paid on the
purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset
the VAT due on the sales of the finished products. |
| Statutory Reserve | Statutory
Reserve In
accordance with the PRC Regulations on Enterprises with Foreign Investment, an enterprise established in the PRC with foreign investment
is required to provide for certain statutory reserves, namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff
Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A wholly-owned
foreign enterprise is required to allocate at least 10% of its annual after-tax profit to the General Reserve Fund until the balance
of such fund has reached 50% of its respective registered capital. A non-wholly-owned foreign invested enterprise is permitted to provide
for the above allocation at the discretion of its board of directors. Appropriations to the Enterprise Expansion Fund and Staff Welfare
and Bonus Fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserves can
only be used for specific purposes and are not distributable as cash dividends. |
| Comprehensive Income (Loss) | Comprehensive
Income (Loss) Comprehensive
income (loss) is defined as the change in equity during the year from transactions and other events, excluding the changes resulting
from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated
comprehensive income consists of foreign currency translation. The Company presents comprehensive income (loss) consists in accordance
with ASC Topic 220, “Comprehensive Income”. |
| Earnings per share | Earnings
per share The
Company calculates earnings per share in accordance with ASC Topic 260 “Earnings per Share.” Basic earnings per share is
computed by dividing the net income by the weighted average number of ordinary shares outstanding during the period. Diluted
earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of
additional ordinary shares that would have been outstanding if the potential ordinary shares equivalents had been issued and if the
additional ordinary shares were dilutive. On October 24, 2019, the Company completed a reverse merger with Greenland Acquisition
Corporation whereby the Company received 7,500,000 shares in exchange for all the share capital, which is reflected retroactively to
December 31, 2017 and will be utilized for calculating earnings per share in all prior periods. The per share amounts have been
updated to show the effect of the exchange on earnings per share as if the exchange occurred at the beginning of both years for the
annual financial statements of the Company. The impact of the stock exchange is also shown on the Company’s Statements of
Shareholders’ Equity. Pursuant
to the Service Agreement entered into and by the Company and Chineseinvestors.com, Inc., an Indiana corporation (“CIIX”)
on August 21, 2019 (the “Service Agreement”), CIIX were to provide certain investor relations services to the Company for
a period of three months beginning on August 21, 2019. On February 24, 2020, the Company and CIIX entered into a termination
agreement (the “CIIX Termination Agreement”) to terminate their respective obligations under the Service Agreement. Pursuant
to the CIIX Termination Agreement, the Company agreed to issue 5,000 restricted ordinary shares, no par value (the “CIIX Termination
Shares”) to CIIX. Pursuant
to the Investor Relations Consulting Agreement entered into and by the Company and Skyline Corporate Communication Group, LLC, a Massachusetts
limited liability Company (“SCCG”) on August 15, 2019 (the “Consulting Agreement”), SCCG were to provide certain
investor relations services to the Company for a period of twelve months beginning on August 15, 2019. On February 25, 2020,
the Company and SCCG entered into a termination agreement (the “SCCG Termination Agreement”) to terminate their respective
obligations under the Consulting Agreement. Pursuant to the SCCG Termination Agreement, the Company agreed to issue 10,000 restricted
ordinary shares, no par value (the “SCCG Termination Shares”) to SCCG. Pursuant
to the CIIX Termination Agreement and the SCCG Termination Agreement, 5,000 and 10,000 restricted ordinary shares, no par value, were
issued to CIIX and SCCG on March 12, 2020 and March 13, 2020, respectively. |
| Segments and Related Information | Segments
and Related Information ASC
280 “Segment reporting” establishes standards for reporting information on operating segments in interim and annual financial
statements. All of the Company’s operations are considered by the chief operating decision maker to be aggregated in one reportable
operating segment. The
Company is engaged in the business of manufacturing and selling various transmission boxes. The Company’s manufacturing process
is essentially the same for the entire Company and is performed in-house at the Company’s facilities in PRC. The Company’s
customers primarily consist of entities in the automotive, construction machinery or warehousing equipment industries. The distribution
of the Company’s products is consistent across the entire Company. In addition, the economic characteristics of each customer arrangement
are similar in that the Company maintains policies at the corporate level. |
| Commitments and contingencies | Commitments
and contingencies In
the normal course of business, the Company is subject to contingencies, including legal proceedings and environmental claims arising
out of the normal course of businesses that relate to a wide range of matters, including among others, contracts breach liability. The
Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an
estimate of the liability. Management may consider many factors in making these assessments including past history, scientific evidence
and the specifics of each matter. The Company’s management has evaluated all such proceedings and claims that existed as of September
30, 2021 and December 31, 2020. Normal course of businesses that relate to a wide range of matters, including among others, contracts
breach liability. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and,
where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history,
scientific evidence and the specifics of each matter. The Company’s management has evaluated all such proceedings and claims that
existed as of September 30, 2021 and December 31, 2020. |
| Related Party | Related
Party In
general, related parties exist when there is a relationship that offers the potential for transactions at less than arm’s-length,
favorable treatment, or the ability to influence the outcome of events different from that which might result in the absence of that
relationship. A related party may be any of the following: a) an affiliate, which is a party that directly or indirectly controls, is
controlled by, or is under common control with another party; b) a principle owner, owner of record or known beneficial owner of more
than 10% of the voting interest of an entity; c) management, which are persons having responsibility for achieving objectives of the
entity and requisite authority to make decision; d) immediate family of management or principal owners; e) a parent Company and its subsidiaries;
and f) other parties that have ability to significant influence the management or operating policies of the entity. The Company discloses
all significant related party transactions. |
| Economic and Political Risks | Economic
and Political Risks The
Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations
may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The
Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies
in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment
and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions
in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion,
remittances abroad, and rates and methods of taxation, among other things. Financial
instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable.
All of the Company’s cash is maintained with state-owned banks within the PRC, and none of these deposits are covered by insurance.
The Company has not experienced any losses in such accounts. A portion of the Company’s sales are credit sales which are primarily
to customers whose abilities to pay are dependent upon the industry economics prevailing in these areas; however, concentrations of credit
risk with respect to trade accounts receivables is limited due to generally short payment terms. The Company also performs ongoing credit
evaluations of its customers to help further reduce credit risk |
| Exchange Risk | Exchange
Risk The
Company cannot guarantee that the current exchange rate will remain steady. Therefore, there is a possibility that the Company could
post the same amount of profit for two comparable periods and yet, because of the fluctuating exchange rates, record higher or lower
profit depending on exchange rate of PRC Renminbi (RMB) converted to U.S. dollars on the relevant dates. The exchange rate could fluctuate
depending on changes in the political and economic environment without notice. |
| Recently Issued Accounting Pronouncements | Recently
Issued Accounting Pronouncements Recent
accounting pronouncements that the Company has adopted or may be required to adopt in the future are summarized below: In
June 2016, the FASB issued ASU 2016-13,” Measurement of Credit Losses on Financial Instruments”, to require financial assets
carried at amortized cost to be presented at the net amount expected to be collected based on historical experience, current conditions
and forecasts. Subsequently, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit
Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, in April 2019. To clarify that receivables arising
from operating leases are within the scope of lease accounting standards. In October 2019, the FASB issued ASU 2019-10, Financial Instruments
– Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842), which defers the effective date for public
filers that are considered small reporting companies as defined by the Securities and Exchange Commission to fiscal years beginning after
December 15, 2022, including interim periods within those fiscal years. Since the Company is a smaller reporting company, implementation
is not needed until January 1, 2023. Adoption of the standard requires using a modified retrospective approach through a cumulative-effect
adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. The Company
is evaluating the impact of this standard on its consolidated financial statements, including accounting policies, processes, and systems,
and expects the standard will have a minor impact on its consolidated financial statements. In
January 2017, the FASB issued ASU No. 2017-04 (Topic 350) Intangibles—Goodwill and Other: Simplifying the Test for
Goodwill Impairment, which removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under
the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit
exceeds its fair value, not to exceed the carrying amount of goodwill. As amended by ASU 2019-10, this ASU will be applied on a prospective
basis and is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted for any impairment
tests performed after January 1, 2017. The Company is evaluating the impact of the application of this standard and does not expect that
the adoption of the ASU 2017-04 will have a material impact on the Company’s consolidated financial statements. In
August 2018, the FASB issued ASU 2018-13 Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which
eliminates, adds, and modifies certain disclosure requirements for fair value measurements under ASC 820. This ASU is to be applied on
a prospective basis for certain modified or new disclosure requirements, and all other amendments in the standard are to be applied on
a retrospective basis. The new standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption
permitted. The Company adopted Topic 820 on January 1, 2020. The adoption of the ASU 2018-13 did not have a material impact on the Company’s
consolidated financial statements. In
December 2019, the FASB issued ASU No. 2019-12, “Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes (“ASU
2019-12”). ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in
Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending
existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2020. The Company does not expect that the requirements of ASU 2019-12 will have
a material impact on its consolidated financial statements. |
| Statutory Reserve | Statutory
Reserve In
accordance with the PRC Regulations on Enterprises with Foreign Investment, an enterprise established in the PRC with foreign investment
is required to provide for certain statutory reserves, namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff
Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A wholly-owned
foreign enterprise is required to allocate at least 10% of its annual after-tax profit to the General Reserve Fund until the balance
of such fund has reached 50% of its respective registered capital. A non-wholly-owned foreign invested enterprise is permitted to provide
for the above allocation at the discretion of its board of directors. Appropriations to the Enterprise Expansion Fund and Staff Welfare
and Bonus Fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserves can
only be used for specific purposes and are not distributable as cash dividends. |
