XML 20 R9.htm IDEA: XBRL DOCUMENT

Restatement of Previously Issued Unaudited Condensed Consolidated Financial Statements

3 Months Ended

Mar. 31, 2018

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Unaudited Condensed Consolidated Financial Statements

NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The financial statements for the three months ended March 31, 2017 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) Company Limited 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 $84,882 at March 31, 2017. The Company restated its consolidated financial statements as of and for the three months ended March 31, 2017 to reflect the correction of the error. The restatement resulted in the Company recording $22,663 of deferred costs of revenue, $135,000 of deferred revenue, $84,882 increase in accumulated deficit, $80,000 of additional service revenue, $52,545 of additional costs of service revenue, and additional net income of $27,455 for the three months ended March 31, 2017.

(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 three months ended March 31, 2017, the Company determined that the incorrect exchange rate was used and corrected it. The Company restated its consolidated financial statements as of and for the three months ended March 31, 2017 to reflect the correction of the error and real estate held for investment was decreased by $202,325 and accumulated other comprehensive income was decreased $204,271.

	In addition, the Company erroneously calculated the noncontrolling interest of Yabez (Hong Kong) Company Limited 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 at March 31, 2017. There was no effect on net loss for 2017.

(C)	In September 2015, the Company acquired Yabez (Hong Kong) Company Limited and calculated goodwill using the partial goodwill method. The Company restated its consolidated financial statements as of and for the three months ended March 31, 2017 to reflect the full goodwill method as 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 March 31, 2017. There was no effect on net loss for 2017.

(D)	In preparing its financial statements for the three months ended March 31, 2017, 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 three months ended March 31, 2017 to reflect an allowance for uncollectible accounts and bad debts, and accounts receivable was decreased by $126,205, bad debt expense was increased by $71,406, and accumulated deficit was increased by $109,705.

The following table presents the effect of the restatements on the Company’s previously issued consolidated balance sheet:

	As of March 31, 2017 (Unaudited)
	As Previously Reported			Adjustments			Notes	As Restated

Accounts Receivable, net	$	492,652		$	(126,205	)	D	$	366,447
Deferred costs related to revenue		-			22,663		A		22,663
Real estate held for investment, net		1,010,630			(202,325	)	B		808,305
Goodwill		1,472,729			174,001		C		1,646,730

Deferred Revenue		-			135,000		A		135,000
Additional paid in capital		7,543,095			1,943		B		7,545,038
Accumulated other comprehensive income		96,467			(204,721	)	B		(107,804	)

Accumulated deficit		(898,743	)		(235,451	)	A, B, D		(1,134,194	)
Noncontrolling interests in consolidated subsidiaries	$	144,922		$	170,912		B, C	$	315,834

The following table presents the effect of the restatements on the Company’s previously issued consolidated statement of operations and comprehensive loss:

	For the three months ended March 31, 2017 (Unaudited)
	As Previously Reported			Adjustments			Notes		As Restated

Service revenue	$	746,167		$	80,000			A	$	826,167

Cost of service revenue		(144,479	)		(52,545	)		A		(197,024	)
General and administrative		(710,748	)		(71,406	)		D		(782,154	)
Net loss attribute to common shareholders		(108,488	)		(43,951	)				(152,439	)
Foreign currency translation income (loss)		(6,431	)		10,445			B		4,014
Comprehensive loss	$	(114,919	)	$	(33,506	)			$	(148,425	)

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 cash flows:

	For the three months ended March 31, 2017 (Unaudited)
	As Previously Reported			Adjustments			Notes		As Restated

Cash flows from operating activities:
Net (loss) income	$	(111,796	)	$	(43,951	)		A	$	(155,747	)
Changes in operating assets and liabilities:
Accounts Receivable, net		(53,235	)		71,406			D		18,171
Deferred revenue		-			(80,000	)		A		(80,000	)
Deferred costs		-			52,545			A		52,545

The information herein amends and supersedes the information contained in our Quarterly Report on Form 10-Q for the three months ended March 31, 2017. 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.