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Revenue from Contracts with Customers
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers

NOTE 2 - REVENUE FROM CONTRACTS WITH CUSTOMERS

 

The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the sale of real estate properties, and revenue from the rental of real estate properties.

 

Revenue from services

 

For certain of our service contracts providing assistance to clients in capital market listings (“Listing services”), our services provided are considered to be one performance obligation. Revenue and expenses are deferred until the performance obligation is complete and collectability of the consideration is probable. For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded as incurred and deferred revenue is recorded for any payments received on such yet to be completed performance obligations. On an ongoing basis, management monitors these contracts for profitability and when needed may record a liability if a determination is made that costs will exceed revenue.

 

For other services such as company secretarial, accounting, financial analysis and related services (“Non-Listing services”), the Company’s performance obligations are satisfied, and the related revenue is recognized, as services are rendered. For contracts in which we act as an agent, the Company reports revenue net of expenses paid.

 

The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract. The adoption of ASC 606 had no impact on the Company’s consolidated financial statements.

 

Revenue from the sale of real estate properties

 

The Company follows the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) in accounting for the sale of real estate properties. The Company records the sale based on completed performance obligations, which typically occurs upon the transfer of ownership of a real estate asset to the buyer. During the three and six months ended June 30, 2020 and 2019, there were no sales of real estate and the Company recorded no sales revenue from the real estate property held for sale.

 

Revenue from the rental of real estate properties

 

Rental revenue represents lease rental income from the Company’s tenants. The tenants pay monthly in accordance with lease agreements and the Company recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from the underlying asset.

 

Cost of revenues

 

Cost of service revenue primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.

 

Cost of real estate properties sold primarily consists of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred.

 

Cost of rental revenue primarily includes costs associated with repairs and maintenance, property insurance, depreciation and other related administrative costs. Property management fees and utility expenses are paid directly by tenants.

 

The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area:

 

    Three Months Ended June 30,  
    2020     2019  
    (Unaudited)     (Unaudited)  
Revenue by service lines:                
Corporate advisory – Non-listing services   $ 355,075     $ 478,783  
Corporate advisory – Listing services     13,385       1,200,000  
Rental of real estate properties     32,680       22,931  
Total revenue   $ 401,140     $ 1,701,714  

 

    Three Months Ended June 30,  
    2020     2019  
    (Unaudited)     (Unaudited)  
Revenue by geographic area:                
Hong Kong   $ 248,980     $ 1,543,598  
Malaysia     107,312       109,976  
China     44,848       48,140  
Total revenue   $ 401,140     $ 1,701,714  

 

    Six Months Ended June 30,  
    2020     2019  
    (Unaudited)     (Unaudited)  
Revenue by service lines:                
Corporate advisory – Non-Listing services   $ 806,788     $ 911,842  
Corporate advisory – Listing services     355,385       1,200,000  
Rental of real estate properties     55,508       51,920  
Total revenue   $ 1,217,681     $ 2,163,762  

 

    Six Months Ended June 30,  
    2020     2019  
    (Unaudited)     (Unaudited)  
Revenue by geographic area:                
Hong Kong   $ 911,473     $ 1,840,903  
Malaysia     231,254       243,999  
China     74,954       78,860  
Total revenue   $ 1,217,681     $ 2,163,762  

 

Our contract balances include deferred costs of revenue and deferred revenue.

 

Deferred Revenue

 

For service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in advance of the performance obligation. Changes in deferred revenue were as follows:

 

    Six Months
Ended
June 30, 2020		  
      (Unaudited)  
Deferred revenue, January 1, 2020   $ 1,202,153  
New contract liabilities     85,385  
Performance obligations satisfied     (355,385 )
Deferred revenue, June 30, 2020   $ 932,153  

 

Deferred Costs of Revenue

 

For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded for any costs incurred in advance of the performance obligation.

 

Deferred revenue and deferred costs of revenue at June 30, 2020 and December 31, 2019 are classified as current assets or current liabilities and totaled:

 

    As of
June 30, 2020		     As of
December 31, 2019		  
      (Unaudited)          
Deferred revenue   $ 932,153     $ 1,202,153  
Deferred costs of revenue   $ 52,397     $ 73,821