| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use
of estimates The
preparation of the consolidated financial statements in conformity with US 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; however actual results could differ materially from those 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. Under
the PRC Foreign Exchange Control Regulations and Administration of Settlement, Sales and Payment of Foreign Exchange Regulations, the
Company is permitted to exchange Chinese Renminbi for foreign currencies through banks that are authorized to conduct foreign exchange
business. Accounts
Receivable Financial
instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company
extends credit to its customers in the normal course of business and generally does not require collateral. The Company’s credit
terms are dependent upon the segment, and the customer. The Company assesses the probability of collection from each customer at the
outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness.
If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed. Management
performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and
its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing
accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade
receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness
of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship
and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates,
which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability
of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability. Accounts
Receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for
doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as identified.
No allowance for doubtful accounts was made for both years ended December 31, 2021 and 2020. Lease The
Company adopted the ASU No. 2016-02, on October 15, 2019 (date of inception). The Company leases office space for fixed periods pre-emptive
extension options. The Company recognizes lease payments for its short-term lease on a straight-line basis over the lease term. As
of December 31, 2021, the Company have one In
determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the
interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company
leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate for the lease. The Company
incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. Revenue
Recognition Revenue
is generated through sale of goods, primarily Bio-Carbon-Based-Fertilizer (“BCBF”). Revenue is recognized when a customer
obtains control of promised goods or services and is recognized in an amount that reflects the consideration that the Company expects
to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and
uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration
that the Company expects to receive in exchange for those goods and services. The Company applies the following five-step model in order
to determine this amount:
(i) identification
of the promised goods and services in the contract;
(ii)
determination
of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the
contract;
(iii)
measurement
of the transaction price, including the constraint on variable consideration;
(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 adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under Topic 606, the Company records revenue when persuasive
evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company
records revenue from the sale of product upon shipment or delivery of the products to the customer. Shipping,
Storage and Handling costs Costs
for shipping, storage and handling activities, including those activities that occur subsequent to transfer of control to the customer,
are recorded as general and administrative expense and are expensed as incurred. The Company accrues costs for shipping, storage and
handling activities that occur after control of the promised good has transferred to the customer. Earnings
Per Share The
Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic
and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic
earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common
shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities
or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding
increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic
and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure. The
Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of
the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary
share outstanding during the period plus the number of additional shares that would have been outstanding if potentially dilutive securities
had been issued. Inventories Inventories
consist of finished goods and are stated at the lower of cost or net realizable value using the first-in first-out method. Net realizable
value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary
to make the sale. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined
necessary. 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. Income
Taxes The
Company accounts for income taxes using the asset and liability method prescribed by 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 years 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 rates is
recognized as income or loss in the period that includes the enactment date. New
U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into
law on December 22, 2017. The U.S. Tax Reform modified the U.S. Internal Revenue Code by, among other things, reducing the statutory
U.S. federal corporate income tax rate from 35 Foreign
Currency 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$”). The Company’s subsidiary in Seychelles, Hong Kong
and PRC which functional currencies are United States Dollars (“US$”), Hong Kong Dollars (“HK$”) and Chinese
Renminbi (“CNY¥”) respectively. In
general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not the US$ are translated
into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance
sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation
of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the
statement of stockholders’ equity. Translation
of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods: SCHEDULE OF FOREIGN CURRENCIES TRANSLATION
For
the year ended December
31, 2021 For
the year ended December
31, 2020
Period-end HK$ : US$1 exchange rate 7.75 7.75
Period-end CNY¥ : US$1 exchange rate 6.36 6.53
Period-average HK$ : US$1 exchange rate 7.75 7.75
Period-average CNY¥ : US$1 exchange rate 6.44 6.89 Fair
Value Measurement Accounting
Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, which defines fair value, establishes
a framework for measuring fair value and expands disclosures about fair value measurements. The statement clarifies that the exchange
price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in
which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset
or liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant
assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset. This
ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and
the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level
1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level
2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the
full term of the asset or liability; and Level
3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported
by little or no market activity). Recently
issued accounting pronouncements In
June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities
to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types
of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13
is effective for the Company beginning January 1, 2023, and early adoption is permitted. The
Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have
a significant impact on the Company’s consolidated financial statements. Economic
and political risks Substantially
all the Company’s services are conducted in the People’s Republic of China (“PRC”), of which operations in the
PRC are subject to special considerations and significant risks not typically associated with companies in rest of the world. 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 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. COVID-19
Uncertainty An
outbreak of respiratory illness caused by the novel coronavirus, commonly referred as “COVID-19” emerged in late 2019 and
has spread globally. The COVID-19 is considered to be highly contagious and poses a serious public health threat. The World Health Organization
labeled the COVID-19 outbreak as a pandemic on March 11, 2020, given its threat beyond a public health emergency of international concern
the organization had declared on January 30, 2020. The
epidemic has resulted in social-distancing restrictions, travel restrictions, and the temporary closure of stores and facilities. The
negative impacts of the COVID-19 outbreak on our business may include, but not strictly be limited to:
- The
uncertain economic conditions may refrain clients from engaging our services.
- The
operations of businesses in most industries have been, and could continue to be, negatively impacted by the epidemic, which may in
turn adversely impact their business performance. We
are unable to accurately predict the impact that the COVID-19 will have due to various uncertainties, including the ultimate geographic
spread of the virus, the severity of the disease, the duration of the outbreak globally, and effectiveness of the actions that may be
taken by governmental authorities. Additionally, it is possible that we may face similar difficulties from future events, such as this,
should there be at any point another global pandemic. As of the current date, we do not believe that we have been directly impacted by
Covid-19. However, economies throughout the world have been impacted significantly in a vast number of ways, and we cannot state with
any level of certainty to what extent we may have been indirectly impacted by market conditions as a result of the pandemic and/or if
the pandemic has forestalled, in any capacity, our growth to date. |
