| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The
accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this
note and elsewhere in the accompanying consolidated financial statements and notes. Going
Concern The
accompanying 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. As reflected in the accompanying financial statements,
for the year ended July 31, 2022, the Company suffered an accumulated deficit of $ 1,760,413 367,820 609,617 The
Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support
from its major shareholders. Management believes the existing shareholders or external financing will provide the additional cash
to meet the Company’s obligations as they become due. 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. Basis
of presentation The
consolidated financial statements for Phoenix Plus Corp. and its subsidiaries for the year ended July 31, 2022 is prepared in accordance
with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of Phoenix
Plus Corp. and its wholly owned subsidiaries, Phoenix Plus Corp., Phoenix Plus International Limited and Phoenix Green Energy Sdn. Bhd..
Intercompany accounts and transactions have been eliminated on consolidation. The Company has adopted July 31 as its fiscal year end. Basis
of consolidation The
consolidated financial statements include the accounts of the Company and its subsidiaries in which the Company is the primary beneficiary.
All inter-company accounts and transactions have been eliminated upon consolidation. PHOENIX
PLUS CORP. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED JULY 31, 2022 AND 2021 (Currency
expressed in United States Dollars (“US$”), except for number of shares) 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 year reported. Actual results may differ from these estimates. Revenue
recognition In
accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic
606, Revenue from Contracts Revenue
is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue. The
Company derives its revenue from provision of technical consultancy on solar power system and consultancy on green energy solution Cost
of revenue Cost
of revenue includes the cost of services and product in providing business mentoring, nurturing, incubating and corporate development
advisory services 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. 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: SCHEDULE
OF PROPERTY, PLANT AND EQUIPMENT ESTIMATED USEFUL LIFE
Classification Estimated
useful life
Leasehold improvement 21
Computer hardware and software 5
Tools and gauges 5 Expenditures
for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property, plant and equipment is the difference
between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the Consolidated Statements of Operations
and Comprehensive Loss. Investment
under equity method The
Company apply the equity method to account for investments it possesses the ability to exercise significant influence, but not control,
over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor
possesses more than 20 In
applying the equity method, the Company records the investment at cost and subsequently increase or decrease the carrying amount of the
investment by proportionate share of the net earnings or losses and other comprehensive income of the investee. The Company records dividends
or other equity distributions as reductions in the carrying value of the investment. Income
taxes The
provision of income taxes is determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”).
Under this method, 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 basis. Deferred tax assets and liabilities
are measured using enacted income tax rates expected to apply to taxable income in the year in which those temporary differences are
expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income
in the year that includes the enactment date. 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% PHOENIX
PLUS CORP. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED JULY 31, 2022 AND 202 (Currency
expressed in United States Dollars (“US$”), except for number of shares) Net
loss per share The
Company calculates net 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$”). The Company’s subsidiary in Labuan and Hong Kong
maintains its books and record in United States Dollars (“US$”) respectively, while the Company’s subsidiary in Malaysia
maintains its books and record in Ringgit Malaysia (“MYR”). Ringgit Malaysia (“MYR”) 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 MYR into US$1 and HK$ into US$1 has been made at the following exchange rates for the respective years: SCHEDULE
OF FOREIGN CURRENCY TRANSLATION
As of and for the year ended July 31,
2022 2021
Year-end MYR: US$1 exchange rate 4.45 4.22
Year-average MYR: US$1 exchange rate 4.25 4.48
Year-end HK$: US$1 exchange rate 7.85 7.77
Year-average HK$: US$1 exchange rate 7.81 7.76 Related
parties Parties,
which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control
the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also
considered to be related if they are subject to common control or common significant influence. PHOENIX
PLUS CORP. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED JULY 31, 2022 AND 2021 (Currency
expressed in United States Dollars (“US$”), except for number of shares) 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: Leases Prior
to August 1, 2019, the Company accounted for leases under ASC 840, Accounting for Leases Leases, Recent
accounting pronouncements ASB
issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. On June 10, 2014,
the Financial Accounting Standards Board 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, which eliminates the concept of a development stage entity (DSE) entirely from current accounting guidance. The Company
has elected adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations
and cash flows since inception. In
May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic
326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement
of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments
in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification.
The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option
for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase
comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets.
Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13
while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10,
which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting
companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning
after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023
as the Company is qualified as a smaller reporting company. The Company is currently evaluating the impact ASU 2019-05 may have on its
consolidated financial statements. The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do 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. PHOENIX
PLUS CORP. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEARS ENDED JULY 31, 2022 AND 2021 (Currency
expressed in United States Dollars (“US$”), except for number of shares) |
