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Restatement of Previously Issued Consolidated Financial Statements | 12 Months Ended
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Dec. 31, 2017
Accounting Changes and Error Corrections [Abstract] |
Restatement of Previously Issued Consolidated Financial Statements | NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS The financial statements for the year ended December 31, 2016 have been restated. On March 15, 2018, our management determined the following:
| ● | that the Company’s method of recognizing revenue on service contracts was erroneously accounted for when billed.
| ● | that the Company erroneously used an incorrect exchange rate in the translation of fixed assets into the Company’s reporting currency.
| ● | that the Company’s accounting for the acquisition of Yabez (Hong Kong) in 2015 was erroneously recorded using the partial goodwill method.
| ● | that the Company erroneously did not record an allowance for uncollectible accounts receivable at December 31, 2016.
The effects on the previously issued financial statements are as follows:
(A) | In 2017, the Company corrected its method of recognizing revenue from certain service contracts to use of the performance completion method. Previously the Company had recognized revenues upon billings. The cumulative effect of the correction of the error was to increase accumulated deficit by $366,099 at December 31, 2015. The Company restated its consolidated financial statements as of and for the year ended December 31, 2016 to reflect the correction of the error. The restatement resulted in the Company recording $315,300 of additional service revenue, $88,992 of additional costs, and additional net income of $226,307 for 2016.
(B) | At December 31, 2015, the Company erroneously calculated the cost of real estate held for investment due to an incorrect exchange rate used for translation of amounts from the local currencies of the Company’s operating subsidiaries into the reporting currency of the Company. In preparing its financial statements for the year ended December 31, 2017, the Company determined that the incorrect exchange rate was used and corrected it. The cumulative effect of the correction of the error was to decrease real estate held for investment by $173,352 and decrease accumulated other comprehensive income by $175,298 at December 31, 2015. The Company restated its consolidated financial statements as of and for the year ended December 31, 2016 to reflect the correction of the error and real estate held for investment was decreased by $212,775 and accumulated other comprehensive income was decreased $214,716. In addition, the Company erroneously calculated the noncontrolling interest of Yabez (Hong Kong) for the year ended December 31, 2015. The cumulative effect of the correction of the error was to increase the accumulated deficit and decrease the noncontrolling interest by $3,088. The Company restated its consolidated financial statements as of and for the year ended December 31, 2016 to reflect the correction of the error, and accumulated deficit was increased by $3,088 while the noncontrolling interest was decreased by $3,088. There was no effect on net income for 2016.
(C) | In September 2015, the Company acquired Yabez (Hong Kong) and calculated goodwill using the partial goodwill method. In preparing its financial statements for the year ended December 31, 2017, the Company determined that the full goodwill method is required by US GAAP. The cumulative effect of the correction of the error was to increase goodwill by $174,001 and noncontrolling interest by $174,001 at December 31, 2015. The Company restated its consolidated financial statements as of and for the year ended December 31, 2016 to reflect the correction of the error, and goodwill and noncontrolling interest were increased by $174,001. There was no effect on net loss for 2016.
(D) | In preparing its financial statements for the year ended December 31, 2016, the Company erroneously did not record an allowance for uncollectible accounts and bad debts. The Company restated its consolidated financial statements as of and for the year ended December 31, 2016 to reflect an allowance for uncollectible accounts and bad debts, and accounts receivable was decreased by $54,799 and accumulated deficit was increased by $54,799.
The following table presents the effect of the restatements on the Company’s previously issued consolidated balance sheet:
|  | As of December 31, 2016 |
|  | As Previously Reported |  |  | Adjustments |  |  | Notes |  |  | As Restated |
Accounts receivable |  | $ | 439,217 |  |  | $ | (54,799 | ) |  |  | D |  |  | $ | 384,418 |
Deferred costs related to revenue |  |  | - |  |  |  | 75,207 |  |  |  | A |  |  |  | 75,207 |
Real estate held for investment, net |  |  | 1,014,289 |  |  |  | (212,775 | ) |  |  | B |  |  |  | 801,514 |
Goodwill |  |  | 1,472,729 |  |  |  | 174,001 |  |  |  | C |  |  |  | 1,646,730 |
Deferred revenue |  |  | - |  |  |  | 215,000 |  |  |  | A |  |  |  | 215,000 |
Additional paid in capital |  |  | 6,626,958 |  |  |  | 1,943 |  |  |  | B |  |  |  | 6,628,901 |
Accumulated other comprehensive income |  |  | 102,898 |  |  |  | (175,298 | ) |  |  | B |  |  |  | (111,818 | )
|  |  |  |  |  |  | (39,418 | ) |  |  | B |  |  |  |  |
Accumulated deficit |  |  | (790,254 | ) |  |  | (191,500 | ) |  |  | A |  |  |  | (981,754 | )
Noncontrolling interests in consolidated subsidiaries |  | $ | 148,230 |  |  | $ | 170,913 |  |  |  | C |  |  | $ | 319,143 |
The following table presents the effect of the restatements on the Company’s previously issued consolidated statement of operations and comprehensive loss:
|  | For the year ended December 31, 2016 |
|  | As Previously Reported |  |  | Adjustments |  |  | Notes |  |  | As Restated |
Service revenue |  | $ | 2,676,292 |  |  | $ | 315,300 |  |  |  | A |  |  | $ | 2,991,592 |
Cost of service revenue |  |  | (997,401 | ) |  |  | (88,992 | ) |  |  | A |  |  |  | (1,086,393 | )
General and administrative |  |  | (1,869,494 | ) |  |  | (54,799 | ) |  |  | D |  |  |  | (1,924,293 | )
Net income (loss) attributable to common shareholders |  |  | (222,324 | ) |  |  | 171,509 |  |  |  |  |  |  |  | (50,815 | )
Foreign currency translation income (loss) |  |  | 28,395 |  |  |  | (39,418 | ) |  |  | B |  |  |  | (11,023 | )
Comprehensive loss |  | $ | (193,928 | ) |  | $ | 132,091 |  |  |  |  |  |  | $ | (61,837 | )
Net loss per share, basic and diluted |  | $ | (0.00 | ) |  |  |  |  |  |  |  |  |  | $ | (0.00 | )
The following table presents the effect of the restatements on the Company’s previously issued consolidated statement of stockholder’s equity:
|  | Additional Paid-in Capital |  |  | Accumulated Other Comprehensive Income (Loss) |  |  | Accumulated Deficit |  |  | Non- Controlling Interest |  |  | Total Equity |
Balance as of December 31, 2015, as previously reported |  | $ | 5,915,294 |  |  | $ | 74,503 |  |  | $ | (567,931 | ) |  | $ | 136,983 |  |  | $ | 5,564,045 |
Prior Period revisions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Correction of errors |  |  | 1,943 |  |  |  | (175,298 | ) |  |  | (363,008 | ) |  |  | 170,913 |  |  |  | (365,450 | )
Balance as of December 31, 2015, as restated |  | $ | 5,917,237 |  |  | $ | (100,795 | ) |  | $ | (930,939 | ) |  | $ | 307,896 |  |  | $ | 5,198,595 |
The following table presents the effect of the restatements on the Company’s previously issued consolidated statement of cash flows:
|  | For the year ended December 31, 2016 |
|  | As Previously Reported |  |  | Adjustments |  |  | Notes |  |  | As Restated |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net (loss) income |  | $ | (211,175 | ) |  | $ | 171,509 |  |  |  | A |  |  | $ | (39,666 | )
Provision for bad debts |  |  | - |  |  |  | 54,799 |  |  |  | D |  |  |  | 54,799 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, net |  |  | (254,462 | ) |  |  | (34,500 | ) |  |  | A, D |  |  |  | (288,962 | )
Deferred revenue |  |  | (174,547 | ) |  |  | (280,800 | ) |  |  | A |  |  |  | (455,347 | )
Deferred costs |  |  | - |  |  |  | 88,994 |  |  |  | A |  |  |  | 88,994 |
Net cash used in operating activities |  | $ | (502,388 | ) |  | $ | 2,160 |  |  |  |  |  |  | $ | (500,228 | )
Net cash used in investing activities |  | $ | (14,566 | ) |  | $ | (2,160 | ) |  |  |  |  |  | $ | (16,726 | )
The information herein amends and supersedes the information contained in our Annual Report on Form 10-K for the year ended December 31, 2016. The affected financial statements and related financial information contained in our previously filed reports for those periods should no longer be relied upon and should be read only in conjunction with the restated financial information set forth herein.

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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