| Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 31, 2023 |
| Accounting Policies [Abstract] | |
| Basis of Presentation and Consolidation | Basis
of Presentation and Consolidation The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The
consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany
transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. |
| Use of Estimates and Assumptions | Use
of Estimates and Assumptions The
preparation of consolidated financial statements in conformity with U.S. GAAP requires the 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 financial
statements and the reported amounts of revenues and expenses during the reporting period. These estimates and judgments are based on
historical information, information that is currently available to the Company and on various other assumptions that the Company believes
to be reasonable under the circumstances. Significant estimates required to be made by management, include, but are not limited to, allowance
for credit losses and impairment assessment for the internally developed software. Actual results could differ from those estimates. |
| Foreign Currency Translation | Foreign
Currency Translation The
Company uses Hong Kong Dollar (“HK$”) as its reporting currency. The functional currency of the Company in British Virgin
Islands is United States Dollar (“US$”). For the Company’s subsidiaries in Hong Kong, the functional currency is HK$.
For the Company’s subsidiary in the PRC, the functional currency is RMB. The functional currencies are the respective local currencies
based on the criteria of ASC 830, “Foreign Currency Matters”. In
the consolidated financial statements, the financial information of the Company and other entities located outside of the Hong Kong has
been translated into HK$. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated
at historical exchange rates, and revenues, and expenses, gains and losses are translated using the average rate for the period. Gains
or losses resulting from foreign currency transactions are included in the accompanying consolidated statement of consolidated statements
of income and comprehensive income. mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) |
| Convenience Translation | Convenience
Translation Translations
of amounts in the consolidated balance sheets, consolidated statements of income and comprehensive income, consolidated statements of
changes in shareholders’ equity and consolidated statements of cash flows from HK$ into US$ as of and for the year ended December
31, 2023 are solely for the convenience of the reader and were calculated at the noon buying rate of US$1 = HK$7.8109, as published in
H.10 statistical release of the United States Federal Reserve Board |
| Investment at fair value | Investment
at fair value Investment
at fair value represents the amount of short-term foreign exchange investment made by the Company involving buying the currency of one
country while selling that of another with the intention to optimize a trading algorithm based on live market interactions. The management
of the Company intended to retain such funds to continue making short-term foreign exchange investment in such investment accounts in
the near future. Such balance is classified as current asset and measured in fair value under ASC 820. Any gain or loss arising from
the transactions would be recognized in profit or loss. |
| Fair Value of Financial Instruments | Fair
Value of Financial Instruments The
fair value of a financial instrument is defined as the exchange price that would be received from an asset or paid to transfer a liability
(as exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
at the measurement date. ASC
820 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the
use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level
1 - Quoted prices in active markets for identical assets and liabilities. Level
2 - Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability,
either directly or indirectly, for substantially the full term of the financial instrument. Level
3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and
liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable
inputs. The
Company considers the carrying amount of its financial assets and liabilities, which consist primarily of cash, accounts receivable,
amounts due from related parties, operating lease, prepaid expenses and other current assets, contract liabilities, income taxes
payable, amounts due to a related party, accrued expenses and other current liabilities approximate the fair value of the
respective assets and liabilities as of December 31, 2022 and 2023 owing to their short-term nature or present value of the assets
and liabilities. The
Company values its short-term investments which mainly consist of foreign exchange investment with certain brokerage companies to trade
with foreign currencies, based on the quoted market value and the Company classifies the valuation techniques that use these inputs as
Level 1, because the prices of the foreign currencies are quoted in the active market. The
following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized
using the fair value hierarchy as shown in the following table. Schedule of Fair Value Hierarchy
As of December 31, 2022
Level 1 Level 2 Level 3 Balance at fair value
Assets HK$ HK$ HK$ HK$
Investment at fair value - Foreign exchange investment 1,979,268 - - 1,979,268
As of December 31, 2023
Level 1 Level 2 Level 3 Balance at fair value
Assets HK$ HK$ HK$ HK$
Investment at fair value - Foreign exchange investment 343,862 - - 343,862
US$ US$ US$ US$
Investment at fair value - Foreign exchange investment 44,023 - - 44,023 The
Company’s non-financial assets, such as property and equipment would be measured at fair value only if they were determined to
be impaired. mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) |
| Cash | Cash Cash
include cash on hand and demand deposits in accounts maintained with commercial banks that can be added or withdrawn without limitation
with original maturities of less than three months. The Company maintains the bank accounts in Hong Kong. Cash balances in bank accounts
in Hong Kong are protected up to HK$ 500,000 |
| Accounts Receivable | Accounts
Receivable On
January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments (“ASC 326”). ASC 326 requires the application of a credit loss model based prospectively on current
expected credit losses (CECL), and replaces the previous model based retrospectively on past incurred losses. The Company adopted ASC
326 using the modified retrospective method for all financial assets measured at amortized cost, with no material cumulative-effect adjustment
to shareholders’ equity recognized as of January 1, 2023. The
Company carries accounts receivable at the face amounts less a reserve for estimated credit losses. The Company estimated its reserve
for credit losses using relevant available information from internal and external sources relating to past events, current conditions
and reasonable and supportable forecasts. During the year ended December 31, 2023, the Company recorded HK$ 998,020 1,495,119 191,415 . |
| Prepaid Expenses | Prepaid
Expenses Prepaid
expenses represent advance payments made to the service providers for the IT solution services and the vendors for certain prepaid services
such as insurance, utilities deposits and rental deposits. Prepaid expenses are unsecured and are reviewed periodically to determine
whether their carrying value has become impaired. As of December 31, 2022 and 2023, management believes that the Company’s prepaid
expenses are not impaired, and there is no material impact over the initial adoption of CECL model in view of the advanced payments made
to the service providers for the IT solution and insurance services and the vendors for certain prepaid services were mainly for the
coming 12 months and the risk of relatively low . |
| Deferred IPO costs | Deferred
IPO costs Deferred
IPO costs consist primarily of direct expenses paid to attorneys, consultants, underwriters, and other parties related to the Company’s
IPO. The balance will be offset with the proceeds received at the closing of the IPO. mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) |
| Lease | Lease The
adoption of Topic 842 resulted in the presentation of operating lease right of use (“ROU”) assets and operating lease liabilities
on the consolidated balance sheet. See Note 8 for additional information. The
lease standard provides practical expedients for an entity ongoing accounting. The Company elected to apply the short-term lease exception
for lease arrangements with a lease term of 12 months or less at commencement. Lease terms used to compute the present value of lease
payments do not include any option to extend or renew the lease that the Company is not able to reasonably certain to exercise upon the
lease inception. Accordingly, operating lease right-of-use assets and liabilities do not include leases with a lease term of 12 months
or less. The
Company did not adopt the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single
lease component. Non-lease components include payments for building management, utilities and property tax. It separates the non-lease
components from the lease components to which they relate. At
inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys
the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract
is or contains a lease, the Company assess whether the contract involves the use of an identified asset, whether it has the right to
obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset. The
operating right-of-use assets and related operating lease liabilities are recognized at the lease commencement date. The Company recognizes
operating lease expenses on a straight-line basis over the lease term. The
Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. |
| Operating lease right-of-use of assets | Operating
lease right-of-use of assets The
right-of-use of asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentive received. |
| Operating lease liabilities | Operating
lease liabilities Lease
liability is initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the
Company incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments,
variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise
price under a purchase option that the Company is reasonably certain to exercise. Lease
liability is measured at amortized cost using the effective interest rate method. It is remeasured when there is a change in future lease
payments, if there is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if there is
any change in the Company assessment of option purchases, contract extensions or termination options. mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) |
| Property and Equipment, net | Property
and Equipment, net Property
and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is provided for on a straight-line basis
over the estimated useful lives of the related assets as follows: Schedule
of Estimated Useful Lives of Related Assets
Computer
equipment 2
Furniture
and fixture 3
Office
equipment 3
Leasehold
improvements Shorter
of 5 years or the remaining lease term Expenditures
for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures
for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated
depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated
statements of Income and comprehensive income in other income or expenses. The
Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates
of useful lives. |
| Intangible assets, net | Intangible
assets, net The
Company’s internally developed software is used in providing financial trading solutions services to customers and the customers
access and uses the software over the internet or via a dedicated line in which an end user of the software does not take possession
of the software. In accordance with ASC 350-40, internally developed software is capitalized during the application development stage.
Research and development expenses related to salaries and payroll related costs for employees involved in the preliminary project stage
and activities occurring after the implementation of the software are expensed as incurred. Costs incurred for software upgrades are
capitalized if they result in additional functionalities or substantial enhancements. Development costs cease capitalization upon completion
of all substantial testing when the software is substantially complete and ready for its intended use and are amortized on a straight-line
basis over the estimated useful life, which is generally three years. Amortization of internal-use software begins when the software
is ready for its intended use. The
Company evaluates annually its intangible assets for potential impairment when events or changes in circumstances indicate that the carrying
amount of the assets may not be recoverable. There were no The
estimated useful lives of intangible assets are as follows: Schedule of Estimated Useful Lives of Intangible Assets
Internally
developed software 3
Software 3 |
| Impairment of Long-Lived Assets | Impairment
of Long-Lived Assets The
Company reviews the recoverability of its long-lived assets whenever events or changes in circumstances (such as a significant adverse
change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset may no longer
be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to
the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum
of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss,
which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows. There were
no mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) |
| Revenue Recognition | Revenue
Recognition The
core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services
to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or
services. The following five steps are applied to achieve that core principle: Step
1: Identify the contract with the customer Step
2: Identify the performance obligations in the contract Step
3: Determine the transaction price Step
4: Allocate the transaction price to the performance obligations in the contract Step
5: Recognize revenue when the company satisfies a performance obligation. The
Company has elected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining
performance obligations that have original expected durations of one year or less. The
Company elected a practical expedient that it does not adjust the promised amount of consideration for the effects of a significant financing
component if the Company expects that, upon the inception of revenue contracts, the period between when the Company transfers its promised
services or deliverables to its clients and when the clients pay for those services or deliverables will be one year or less. As
a practical expedient, the Company elected to expense the incremental costs of obtaining a contract when incurred if the amortization
period of the asset that the Company otherwise would have recognized is one year or less. The
Company is engaged in the development and provision of financial trading solutions to customers via internet or platform as software
as a service. The
transaction price is allocated to each performance obligation on a relative stand-alone selling price basis. The transaction price allocated
to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The
Company enters into contracts with customers that include promises to transfer various services, which are generally capable of being
distinct and accounted for as separate performance obligations. Revenue is recognized when the promised services are transferred to customers,
in an amount that reflects the consideration allocated to the respective performance obligation. The
Company provides trading solution services to customers (including brokers and institutional clients) for their trading on forex, commodity
and bullion, through the Company’s internally developed trading platform as software as a service. The Company’s internally
developed software is used in providing financial trading solutions services to customers and the customers access and uses the software
over the internet or via a dedicated line in which an end user of the software does not take possession of the software. The Company’s
trading solution provides a variety of functions suitable for front-end transaction executions and back-office settlement operations.
In a contract with a customer, it would normally require the Company to perform or delivery one or more of the following in return for
a consideration. The contract normally includes one or more of the following services, subject to the request of the customers, and the
transaction price of each service fee has stated stand-alone in the contract with reference to the Company’s price list. The Company
identified each distinct service as a performance obligation. The recognition and measurement of revenues is based on the assessment
of individual contract terms. The
Company’s principal revenue stream includes:
(a) Initial
set up, installation and customization services The
Company provides initial set up, installation and customization services of trading platform solution and financial value-added services
for each customer as agreed upon in the contracts. Initial set up, installation and customization services are services to help the customer
to configure the platform according to the needs of the customers. The Company provides specific customization as part of its development
and provision of financial trading solutions. The Company’s customization services include development of customer-requested functions
and features on the Company’s platform per customer specifications, i.e., the software specifications. Such services are undertaken
specifically for the customer in question and do not necessarily benefit other customers. mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) As
the initial set up, installation and customization services are capable of being distinct and the promise to transfer the service is
distinct within the context of the contract, the Company concludes that the initial set up, installation and customization services to
be accounted for as a single performance obligation. The entire transaction prices of initial set up, installation and customization
services are allocated to a single performance obligation and the Company recognizes revenue based on its effort or inputs to the satisfaction
of a performance obligation over time as work progresses because of the continuous transfer of control to the customer. The
Company uses input method represent a reasonable measure of progress towards the satisfaction of a performance in order to estimate the
portion of revenue earned.
(b) Subscriptions The
Company provides customers the right to access its internally developed trading platform for the use of the trading solutions services
for a specified period of time. The
Company concludes that each monthly subscription fee (1) is distinct and (2) meets the criteria for recognizing revenue over time. In
addition, the Company concludes that the services provided each month are substantially similar and result in the transfer of substantially
similar services to the customers each month. That is, the benefit consumed by the clients is substantially similar for each month. Therefore,
the Company concludes that the monthly subscription fee satisfies the requirements of ASC 606-10-25-14(b) to be accounted for as a single
performance obligation. The Company recognizes revenues from subscriptions ratably when it satisfies its performance obligations throughout
the contract terms.
(c) Hosting,
support and maintenance services The
Company provides hosting, technical support and maintenance services to customers for the use of the trading solutions services for a
specific period. The Company concludes that each monthly hosting, support and maintenance service fee (1) is distinct and (2) meets the
criteria for recognizing revenue over time. In addition, the Company concludes that the services provided each month are substantially
similar and result in the transfer of substantially similar services to the customers each month. That is, the benefit consumed by the
clients is substantially similar for each month. Therefore, the Company concludes that the monthly hosting, support and maintenance service
fee satisfies the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance obligation. The
Company recognizes revenues from hosting, support and maintenance services ratably when it satisfies its performance obligations throughout
the contract terms.
(d) Liquidity
services The
Company provides liquidity services to customers for the use of the fully automatic hedging solution and sending their clients’
orders directly to liquidity providers such as institutional brokers, market makers, exchanges and prime of prime brokers. The Company’s
liquidity services enable its customers to access and match with the liquidity made available by liquidity providers through the Company’s
trading solutions. The liquidity services are distinct and are identified as one performance obligation. As stipulated in the con tract,
the Company will charge a liquidity service income based on the transaction volume of orders sent directly to the liquidity providers
under the liquidity services provided by the Company, with a minimum monthly fee for certain customers.
(e) White
label services The
Company provides white label services to customers by allowing them to add additional labels or brands to the trading platform services.
This provides customers the highest flexibility to operate their trading platform business based on their individual business development
strategy or marketing needs at a lower operating cost. The Company concludes that each monthly white label service fee at fixed rate
(1) is distinct and (2) meets the criteria for recognizing revenue over time. In addition, the Company concludes that the services provided
each month are substantially similar and result in the transfer of substantially similar services to the customers each month. That is,
the benefit consumed by the clients is substantially similar for each month. Therefore, the Company concludes that the monthly white
label service fee satisfies the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance obligation. The Company
recognizes revenues from white label services ratably when it satisfies its performance obligations throughout the contract terms. mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued)
(f) Quotes/news/package
subscription services The
Company provides subscription services to customers for professional strategy analysis, economic calendar, instant news, real-time quotes
and data feed. The Company will subscribe the information or data from the service providers and will convert the raw data into usable
data that can be used in the trading platform of the Company. The Company concludes that each monthly subscription fee at fixed rate
(1) is distinct and (2) meets the criteria for recognizing revenue over time. In addition, the Company concludes that the services provided
each month are substantially similar and result in the transfer of substantially similar services to the customers each month. That is,
the benefit consumed by the clients is substantially similar for each month. Therefore, the Company concludes that the monthly subscription
service fee satisfies the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance obligation. The Company recognizes
revenues from subscription services ratably when it satisfies its performance obligations throughout the contract terms. The
following table presents disaggregated information of revenues by business lines for the years ended December 31, 2021, 2022 and 2023,
respectively: Schedule
of Disaggregation Information of Revenues
2021 2022 2023 2023
For the years ended December 31,
2021 2022 2023 2023
HK$ HK$ HK$ US$
Initial set up, installation and customization services 8,147,473 7,140,076 8,973,079 1,148,789
Subscriptions 12,124,676 11,414,976 11,445,019 1,465,263
Hosting, support and maintenance services 3,304,830 4,186,369 4,338,184 555,401
Liquidity services 3,220,992 6,699,586 2,626,516 336,263
White label services 1,860,221 1,889,188 2,122,198 271,697
Quotes/news/package subscription services 3,554,778 3,601,632 2,456,181 314,456
Total revenue 32,212,970 34,931,827 31,961,177 4,091,869 Revenue
disaggregated by timing of revenue recognition for 2021, 2022 and 2023 is disclosed in the table below:
2021 2022 2023 2023
For the years ended December 31,
2021 2022 2023 2023
HK$ HK$ HK$ US$
Point in time 3,506,631 6,699,586 2,626,516 336,263
Over time 28,706,339 28,232,241 29,334,661 3,755,606
Total revenue 32,212,970 34,931,827 31,961,177 4,091,869 The
Company also selected to apply the practical expedients allowed under ASC Topic 606 to omit the disclosure of remaining performance obligations
for contracts with an original expected duration of one year or less. There is no mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) |
| Contract Liabilities | Contract
Liabilities The
Company’s contract liabilities include payments received in advance of performance under trading solution service contracts which
will be recognized as revenue as the Company executed the trading solution services with customers under the contract, as well as the
deferred installation service fee received from trading solution services. Contract
Liabilities are recognized when the customers pay consideration before the Company recognizes the related revenue. Contract Liabilities
would also be recognized if the Company has an unconditional right to receive consideration before the Company recognizes the related
revenue. |
| Other Income (expense), net | Other
Income (expense), net Government
subsidies primarily relate to (i) one-off entitlement granted by the Hong Kong government pursuant to the Employment Support Scheme under
the Anti-epidemic Fund in 2021 and 2022 and (ii) funds for participation in promotion activities in 2023. Employers participating in
ESS were required to undertake and warrant that they would: (i) not implement redundancies during the subsidy period; and (ii) spend
all the wage subsidies on paying wages to their employees. If an employer fails to use all the subsidies received to pay the wages of
his/her employees, the Hong Kong Government will claw back the unspent balance of the subsidy. If the total number of employees on the
payroll in any one month of the subsidy period is less than the “committed headcount of paid employees”, the employer will
have to pay a penalty to the Hong Kong Government. The Company has (i) not implement redundancies during the subsidy period; and (ii)
spend all the wage subsidies on paying wages to its employees. There was no unfulfilled conditions nor other contingencies attached to
the ESS funding. Government subsidies received and recognized as other income totaled HK$ 379,363 734,059 34,261 4,386 |
| Cost of Revenue | Cost
of Revenue The
Company’s cost of revenue is primarily comprised of the amortization of the internally developed software, staff costs and other
direct costs associated with providing trading solution services, including data center and support costs related to delivering online
services. These costs are expenses as incurred. |
| Research and development | Research
and development Research
and development expenses primarily consist of payroll and other personnel-related expenses of the Company’s software development
team. mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) |
| Income Taxes | Income
Taxes The
Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the consolidated 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets
to the amount expected to be realized. The
provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for
consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This
interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred
income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The
Company believes there were no uncertain tax positions as of December 31, 2022 and 2023, respectively. The Company does not expect that
its assessment regarding unrecognized tax positions will materially change over the next 12 months. In general, the Inland Revenue Department
of Hong Kong has up to seven years to conduct examinations of the Company’s tax filings. Accordingly, the tax years from 2018 to
2023 of the Company’s Hong Kong subsidiaries remain open to examination by the taxing jurisdictions. The Company is not currently
under examination by an income tax authority, nor has it been notified that an examination is contemplated. |
| Earnings Per Share | Earnings
Per Share The
Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”).
ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing income
available to ordinary shareholders of the Company by the weighted average ordinary shares outstanding during the period. Diluted EPS
takes into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and
converted into ordinary shares. As of December 31, 2022 and 2023, there were no dilutive shares. |
| Comprehensive Income | Comprehensive
Income Comprehensive
income consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers
to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded
from net income. Other comprehensive income (loss) consists of foreign currency translation adjustment resulting from the Company translating
its financial statements from functional currency into reporting currency. |
| Statement of Cash Flows | Statement
of Cash Flows In
accordance with ASC 230, “Statement of Cash Flows”, cash flows from the Company’s operations are formulated based upon
the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily
agree with changes in the corresponding balances on the balance sheets. |
| Commitments and Contingencies | Commitments
and Contingencies In
the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business,
which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred
and the amount of the assessment can be reasonably estimated. If
the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be
estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially
material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the
contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee
would be disclosed. |
| Related parties | 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, such as a family member or relative,
shareholder, or a related corporation. mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) Significant
Risks |
| Market Risk of Financial Instrument | Market
Risk of Financial Instrument We
are subject to financial market risks, including changes in foreign currency exchange rate risk with respect to our investment at fair
value consisting of short-term foreign exchange investment made by the Company which is denominated in the US$. The fluctuation in US$
may result in increase or decrease in the value of our investment at fair value. We consider the foreign exchange risk in relation to
transactions denominated in US$ with respect to HK$ is not significant as HK$ is pegged to US$. The
trades of foreign currencies conducted by the Company are denominated in the US$ and are paired with currencies with strong liquidity
traded in highly transparent markets, including such currencies as the EURO, USD, GBP, CHF, AUD, CAD and NZD, etc. Fluctuation in exchange
rates, changes in monetary and/or fiscal policy or finflation in the countries in which the Company paired its trades of foreign currencies
could have a material adverse effect on its results of operations. The clear position limits and floating profit/loss limits are set
to manage the market risks of its foreign exchange positions. |
| Currency Risk | Currency
Risk The
Company’s operating activities are transacted in HK$. Foreign exchange risk arises from future commercial transactions, recognized
assets and liabilities and net investments in foreign operations. The Company considers the foreign exchange risk in relation to transactions
denominated in HK$ with respect to US$ is not significant as HK$ is pegged to US$. |
| Concentration and Credit Risk | Concentration
and Credit Risk Financial
instruments that potentially subject the Company to the concentration of credit risks consist of cash and accounts receivable. The maximum
exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates. The Company deposits its cash with
financial institutions located in Hong Kong. The Company believes that no significant credit risk exists as these financial institutions
have high credit quality and the Company has not incurred any losses related to such deposits. For
the credit risk related to accounts receivable, the Company performs periodic credit evaluations of its customers’ financial condition
and generally does not require collateral. The Company establishes an allowance for credit losses based upon estimates, factors surrounding
the credit risk of specific customers and other information. The allowance amounts were immaterial for all periods presented. The management
believes that its contract acceptance, billing, and collection policies are adequate to minimize material credit risk. Application for
progress payment of contract works is made on a regular basis. The Company seeks to maintain strict control over its outstanding receivables.
Overdue balances are reviewed regularly by the management. The management considers the credit risk of prepayment is relatively
low and there is no material impact over the initial adoption of CECL model because the advanced payments made to the service providers
for the IT solution and insurance services and the vendors for certain prepaid services were mainly for the coming 12 months. For
the years ended December 31, 2021, 2022 and 2023, all of the Company’s assets were located in Hong Kong and all of the Company’s
revenue were derived from its subsidiaries located in Hong Kong. The Company has a concentration of its revenue and accounts receivable
with specific customers. For
the year ended December 31, 2021, one customer accounted for approximately 10.5 18.0 10 As
of December 31, 2021, one customer’s accounts receivable accounted for 88.4 27.2 21.4 13.9 10.1 For
the years ended December 31, 2021, 2022 and 2023, no vendor accounted for over 10 |
| Interest rate risk | Interest
rate risk Fluctuations
in market interest rates may negatively affect the Company’s financial condition and results of operations. The Company is exposed
to floating interest rate risk on cash deposit and floating rate borrowings, and the risks due to changes in interest rates is not material.
The Company has not used any derivative financial instruments to manage the interest risk exposure. mF
International Limited and Subsidiaries Notes
to Consolidated Financial Statements 2.
Summary of Significant Accounting Policies (Continued) |
| Recently Issued Accounting Standards, not yet Adopted by the Company | Recently
Issued Accounting Standards, not yet Adopted by the Company The
ASU 2023-09: Income Taxes (Topic 740): Improvements to Income Tax Disclosures enhances existing income tax disclosures primarily related
to the rate reconciliation and income taxes paid information. With regard to the improvements to disclosures of rate reconciliation,
a public business entity is required on an annual basis to (1) disclose specific categories in the rate reconciliation and (2) provide
additional information for reconciling items that meet a quantitative threshold. Similarly, a public entity is required to provide the
amount of income taxes paid (net of refunds received) disaggregated by (1) federal, state, and foreign taxes and by (2) individual jurisdictions
in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds
received). The ASU also includes certain other amendments to improve the effectiveness of income tax disclosures, for example, an entity
is required to provide (1) pretax income (or loss) from continuing operations disaggregated between domestic and foreign, and (2) income
tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-07: Segment Reporting (Topic
280): Improvements to Reportable Segment Disclosures. The ASU will be effective for annual periods beginning after December 15, 2024.
Entities are required to apply the ASU on a prospective basis. The adoption of ASU 2023-09 is not expected to materially impact the Company’s
consolidated balance sheets, statements of income and comprehensive income, cash flows or disclosures. The
ASU 2023-07: Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures provides improvements to reportable segment
disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance
interim disclosure requirements, clarify circumstances in which an entity can disclose multiple measures of segment profit or loss, provide
new segment disclosure requirements for entities with a single reportable segment and contain other disclosure requirements. The ASU
is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024.
The ASU should be adopted retrospectively to all periods presented in the financial statements unless it is impracticable to do so. The
adoption of ASU 2023-07 is not expected to materially impact the Company’s consolidated balance sheets, statements of income and
comprehensive income, cash flows or disclosures. Other
accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material
impact on the consolidated financial statements upon adoption. The Company does not discuss recent standards that are not anticipated
to have an impact on or are unrelated to its consolidated balance sheets, statements of income and comprehensive income, cash flows or
disclosures. |
