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Variable Interest Entity (VIE) (Superior Living SDN. BHD.)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

3 – Variable Interest Entity (“VIE”)

SEA is a trading company incorporated on March 4, 2004, under the laws of Malaysia. SEA provided all of the Company’s purchases. Its equity at risk was insufficient to finance its activities and 100% of its business is transacted with the Company. Therefore it was considered to be a VIE and the Company is the primary beneficiary since it has both of the following characteristics:

	a.	The power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and
	b.	The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Accordingly, the accounts of SEA is consolidated in the accompanying unaudited condensed financial statements.

The carrying amount of the VIE’s assets and liabilities were as follows:

	March 31, 2020			December 31, 2019

Current assets	$	514,203		$	572,469
Current liabilities		(495,419	)		(547,627	)
Net assets	$	18,784		$	24,842

	March 31, 2020		December 31, 2019

Current liabilities:
Accounts payable	$	491,628	$	520,786
Other payables and accrued liabilities		3,408		4,896
Other payables - related party		346		993
Customer deposits		-		20,912
Taxes payable		37		40
Total current liabilities	$	495,419	$	547,627

The summarized operating results of the VIE’s are as follows:

	For the Three Months Ended March 31, 2020			For the Three Months Ended March 31, 2019

Operating revenues	$	9,581		$	448,401
Gross profit (loss)	$	190		$	(1,755	)
Loss from operations	$	(4,770	)	$	(7,133	)
Net loss	$	(4,803	)	$	(14,168	)

3 -

VARIABLE INTEREST ENTITY (“VIE”)

SEA is a trading company incorporated on March 4, 2004, under the laws of in Malaysia. SEA provided all of the Company’s purchases. Its equity at risk was insufficient to finance its activities and 100% of its business is transacted with the Company. Therefore it was considered to be a VIE and the Company is the primary beneficiary since it has both of the following characteristics:

	a.	The power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and
	b.	The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Accordingly, the accounts of SEA are consolidated in the accompanying consolidated financial statements.

The carrying amount of the VIE’s assets and liabilities were as follows:

	December 31, 2019			December 31, 2018

Current assets	$	572,469		$	243,766
Current liabilities		(547,627	)		(216,187	)
Net assets	$	24,842		$	27,579

	December 31, 2019		December 31, 2018

Current liabilities:
Accounts payable	$	520,786	$	-
Other payables and accrued liabilities		4,896		978
Other payables - related party		993		984
Customer deposits		20,912		214,199
Taxes payable		40		26
Total current liabilities	$	547,627	$	216,187

The summarized operating results of the VIE’s are as follows:

	For the Year Ended December 31, 2019			For the Year Ended December 31, 2018

Operating revenues	$	1,382,516		$	883,216
Gross profit	$	47,800		$	138,508
Income from operations	$	26,613		$	119,849
Net income (loss)	$	(2,956	)	$	144,042