| Summary of Significant Accounting Policies and Organization | NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (A) Organization Golden Royal Development Inc. (the “Company”)
was incorporated under the laws of the State of Delaware on November 13, 2016. As of September 30, 2020 and 2019, the
Company has no revenues from its oil, gas and mining properties operations. The Company’s accounting year end
is September 30. The Company is a business that is designed
to engage in mineral exploration activities. The Company’s activities since inception have consisted of identifying and acquiring
oil, gas and mining properties. The Company is also in the process of raising additional equity capital to support its development activities
to acquire additional mining properties as soon as possible. The Company’s activities are subject to significant risks and uncertainties,
including failing to secure additional funding to operationalize the Company’s current plan to identify and acquire the mining properties. (B) Use of Estimates In preparing financial statements in conformity
with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues
and expenses during the reported period. Significant estimates include value of inventory and valuation of deferred tax assets. Actual
results could differ from those estimates. (C) Cash and Cash Equivalents The Company considers all highly liquid
temporary cash investments with an original maturity of three months or less to be cash equivalents. At September 30, 2020 and September
30, 2019, the Company had no cash equivalents. (D) Loss Per Share Basic and diluted net loss per common
share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, “Earnings Per Share.”
Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents
and potentially dilutive securities outstanding during the period. At September 30, 2020 and 2019, the Company did not have any outstanding
dilutive securities. (E) Income Taxes The Company accounts for income taxes under
FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company’s income tax expense
differed from the statutory rates (federal 21% and state 6.5%) as follows:
September 30, 2020 September 30, 2019
Expected tax expense (benefit) - Federal $ (7,959 ) $ (14,414 )
Expected tax expense (benefit) - State (2,635 ) (4,772 )
Non-deductible expenses 2,267 1,868
Change in valuation allowance 8,327 17,318
Actual tax expense (benefit) $ - $ - The net deferred taxes in the accompanying
balance sheets includes the following amounts of deferred tax assets and liabilities:
Gross deferred tax assets:
Bad debt expense $ - $ -
Net operating loss carryforwards (29,164 ) (20,836 )
Total deferred tax assets (29,164 ) (20,836 )
Less: valuation allowance 29,164 20,836
Net deferred tax asset recorded $ - $ - As of September 30, 2020 and 2019, the
Company has a net operating loss carry forward of approximately $111,589 and $79,726. Of the amount, $13,463 of net operating loss can
be carried forward to offset future taxable income through 2038 and the remaining can be carried forward indefinitely subject to limitation.
The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This
is necessary due to the Company’s continued operating loss and the uncertainty of the Company’s ability to utilize all of
the net operating loss carryforwards before they will expire through the year 2040. The net change in the valuation allowance
for the years ended September 30, 2020 and 2019 was an increase of $8,327 and $17,318, respectively. The company’s federal income tax
returns for the years 2016-2020 remain subject to examination by the Internal Revenue Service through 2025. (F) Revenue Recognition The Company revenue recognition policy
follows guidance from Accounting Standards Codification (ASC) 606, Revenue from contract with customers. Revenue is recognized when the
Company transferred promised goods and services to the customer and in the amount that reflect the consideration to which the company
expected to be entitled in exchange for those goods and services. The Company applies the following five-step
model in order to determine this amount:
(i) Identification of Contact with a customer;
(ii ) Identify the performance obligation of the contract
(iii) Determine transaction price;
(iv) Allocation of the transaction price to the performance obligations; and
(v) Recognition of revenue when (or as) the Company satisfies each performance obligation. The Company has been in the exploration
stage since its formation on November 13, 2016 and has not yet realized any revenues from its planned operations. It is primarily engaged
in the acquisition and exploration of oil, gas and mining properties. (G) Mineral Property Pursuant to Statement of FASB ASC No. 360,
the recoverability of the acquisition costs associated with the purchase of mineral rights presumes to be insupportable prior to determining
the existence of a commercially minable deposit and have to be expensed. For the years ended September 30, 2020 and 2019, the Company
had expensed $1,000 and $1,050, respectively, related to the mineral rights acquisition and exploration costs. (H) Fair Value of Financial Instruments The Company measures its financial assets
and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, and the short-term
portion of long-term debt, the carrying amounts approximate fair value due to their short maturities. We adopted accounting guidance for financial
and non-financial assets and liabilities (ASC 820). The adoption did not have a material impact on our results of operations, financial
position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures.
This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require
or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses
valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash
flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief
description of those three levels:
● Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
● Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
● Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use. (I) Recent Accounting Pronouncements In February 2016, the FASB issued ASU No.
2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities
on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease,
with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that
a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position
a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for
the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018,
including interim periods within those fiscal years. The adoption of ASU No. 2016-02 has no impact on our financial statements. All other newly issued accounting pronouncements,
but not yet effective, have been deemed either immaterial or not applicable. (J) Business Segments The Company operates in one segment and
therefore segment information is not presented. |
