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BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY (Tables)

6 Months Ended

Dec. 31, 2021

BUSINESS ACQUISITION AND INVESTMENT IN UNCONSOLIDATED ENTITY

Summary of fair values of the identifiable assets and liabilities

​

​	​	​	​	​	​	​
​		RMB			U.S. Dollars
Cash		¥	471,843	​	$	74,173
Trade accounts receivable, net		​	831,049	​		130,639
Other receivables, net		​	144,285	​		22,681
Contract costs, net		​	75,250	​		11,829
Prepaid expenses		​	91,132	​		14,326
Property and equipment, net		​	118,130	​		18,570
Intercompany receivables*		​	6,850,000	​		1,076,804
Intangible assets- customer relationship		​	7,000,000	​		1,100,384
Goodwill		​	6,996,895	​		1,099,895
Trade accounts payable		​	(1,032,078)	​		(162,240)
Other payables		​	(1,273,182)	​		(200,141)
Other payable- related parties		​	(479,959)	​		(75,448)
Deferred revenue		​	(39,786)	​		(6,254)
Accrued payroll and employees’ welfare		​	(1,629,519)	​		(256,157)
Taxes payable		​	(64,253)	​		(10,100)
Deferred tax liability		​	(1,050,000)	​		(165,060)
Total		¥	17,009,807	​	$	2,673,901
​	​	​	​	​	​	​
Cash considerations		​	—	​		—
Deemed equity consideration to acquire 8% equity interest in FGS		​	1,689,807	​		265,634
Fair value of previously held equity interest		​	30,530,000	​		4,799,244
Non-controlling interest		​	34,790,000	​		5,468,906
Capital contribution receivable due from non-controlling Interest		​	(50,000,000)	​		(7,859,883)
Total		¥	17,009,807	​	$	2,673,901

​

*Intercompany receivables from Nanjing Recon and BHD are eliminated upon consolidation.

Schedule of fair value of goodwill acquired and carrying value, customer relationship and its estimated useful lives

The identifiable goodwill acquired and the carrying value as of December 31, 2021 is as follows:

​	​	​	​	​	​	​
​		Preliminary Fair Value
​	​	RMB			U.S. Dollars
​	​	(Unaudited)		​	(Unaudited)
Goodwill		¥	6,996,895	​	$	1,099,895
Less: impairment		​	—	​		—
The carrying value of goodwill as of December 31, 2021		​	6,996,895	​		1,099,895

​

The fair value of identified intangible assets, which is customer relationship, and its estimated useful lives is as follows:

​

​	​	​	​	​	​	​	​	​
​		​	​			​		Average
​	​	​	​	​	​	​	​	Useful Life
​	​	Preliminary Fair Value					​	(in Years)
​	​	RMB		​	U.S. Dollars		​	​
​	​	(Unaudited)		​	(Unaudited)		​	​
Intangible assets - customer relationship		¥	7,000,000	​	$	1,100,383		10
Less: accumulated amortization		​	(700,000)	​		(110,038)
Total intangible assets, net as of December 31, 2021		​	6,300,000	​		990,345

X

- Definition

Tabular disclosure of the characteristics, including initial carrying value, residual amount, weighted average useful life, of finite-lived intangible assets acquired during the period by major class. A major class is composed of intangible assets that can be grouped together because they are similar, either by nature or by their use in the operations of the company.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 30
-Section 50
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- Definition

Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts.

+ References

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