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CONCENTRATIONS OF RISKS | 3 Months Ended
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Mar. 31, 2022
Risks and Uncertainties [Abstract] |
CONCENTRATIONS OF RISKS | 17. CONCENTRATIONS OF RISKS (a) Major customers For the three months ended March 31, 2022, and 2021, no customer accounted for 10% or more of the Company’s total revenues. As of March 31, 2022, nine individual customers accounted for 100.0% of the Company’s balance of accounts receivable. There was no accounts receivable balance as of December 31, 2021. (b) Major vendors For the three months ended March 31, 2022, two vendors accounted for approximately 84% and 16% of the Company’s total purchases, respectively. The Company did not purchase any goods from its suppliers for the three months ended March 31, 2021. As of March 31, 2022, two vendors accounted for approximately 62% and 38% of the Company’s total balance of accounts payable, respectively. The vendor which accounted for 38% of the Company’s total balance of accounts payable is a related company, i.e. CTA Nutriceuticals (Asia) Sdn Bhd. As of December 31, 2021, one vendor accounted for 100% of the total balance of accounts payable. AGAPE ATP CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Currency expressed in United States Dollars (“US$”), except for number of shares) 17. CONCENTRATIONS OF RISKS (CONT’D) (c) Commission Expenses to Sales Distributors and Stockists For the three months ended March 31, 2022, no sales distributor accounted for 10% or more of the Company’s commission expense. For the three months ended March 31, 2021, one sales distributor accounted for approximately 10.2% of the Company’s commission expense. (d) Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. As of March 31, 2022, and December 31, 2021, $850,435 and $554,864 were deposited with financial institutions, respectively, $429,916 and $295,761 of these balances are not covered by deposit insurance, respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its account receivable is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. Historically, the Company did not have any bad debt on its account receivable. (e) Exchange rate risk The Company cannot guarantee that the current exchange rate will remain steady; therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of RM and HK$ converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

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- Definition The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI https://asc.fasb.org/topic&trid=2134479 + Details
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