NOTES
TO FINANCIAL STATEMENTS
For
the THREE MONTHS ended FEBRUARY 29, 2020
AND FEBRUARY 28, 2019 (UNaudited)
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
1.
ORGANIZATION AND BUSINESS BACKGROUND
Leader
Hill Corporation, a Nevada corporation (“the Company”) was incorporated under the laws of the State of Nevada on August
21, 2017.
We,
Leader Hill Corporation (“the Company”), are an early stage business consulting company that intends to assist start-up
to midsize companies in the East Asia region, with a focus on mainland China and Hong Kong, to operate their businesses more cost
effectively through our multifaceted consulting services.
The
Company’s executive office is located at Flat 1204 Block B, Mei Li Yuan, Hong Ling Middle Road, Luohu, Shenzhen 518000 China.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
The
financial statements for Leader Hill Corporation are prepared in accordance with accounting principles generally accepted in the
United States of America (“US GAAP”). The Company has adopted November 30 as its fiscal year end.
Use
of estimates
Management
uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions
affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets,
and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Revenue
from services
The
Company adopted Accounting Standards Codification (“ASC”) 606. ASC 606, Revenue from Contracts with Customers, establishes
principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the
entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue
to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled
to receive in exchange for those goods or services recognized as performance obligations are satisfied.
The
Company has assessed the impact of the guidance by performing the following five steps analysis:
Step
1: Identify the contract
Step 2: Identify the performance obligations
Step 3: Determine the transaction price
Step 4: Allocate the transaction price
Step 5: Recognize revenue
Based
on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current
revenue streams in scope of Topic 606 and therefore there were no material changes to the Company’s consolidated financial
statements upon adoption of ASC 606.
Revenue
is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue.
Revenue
from supplies of consulting services is recognized when title and risk of loss are transferred and there are no continuing obligations
to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the services are collected
by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments
that are based upon management’s best estimates and historical experience and are provided for in the same period as the
related revenues are recorded. Based on limited operating history, management estimates that there was no sales return for the
period reported.
The
Company derives its revenue from direct sales to individuals and business companies. Generally, the Company recognizes revenue
when services are sold and accepted by the customers and there are no continuing obligations to the customer.
General
and administrative expenses
For
the three months ended February 29, 2020, the company has incurred general and administrative expenses of $5,830, which consist
of mainly financial statement review, filing and transfer agent fee.
For
the three months ended February 28, 2019, the company has incurred general and administrative expenses of $4,944, which consist
of mainly financial statement review, filing and transfer agent fee.
Cash
and cash equivalents
Cash
and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions
and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
The
company has a cash and cash equivalents of $511 and $525 as of February 29, 2020 and November 30, 2019 respectively.
Accounts
receivable
Accounts
receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which
are due on demand. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical
collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition,
credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account
balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery
is considered remote.
Plant
and equipment
Plant
and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated
on the straight-line basis over the following expected useful lives from the date on which they become fully operational:
Categories
|
|
Estimated
useful life
|
Office
equipment
|
|
5
years
|
Expenditures
for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference
between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statement of operations.
The
company has incurred depreciation expenses of $135 and $136 for the three months ended February 29, 2020 and February 28, 2019
respectively.
Net
income/(loss) per share
The
Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic
income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding
during the period. Diluted income per share is computed similar to basic income/(loss) per share except that the denominator is
increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents
had been issued and if the additional common shares were dilutive.
Related
parties
Parties,
which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly,
to control the other party or exercise significant influence over the other party in making financial and operating decisions.
Companies are also considered to be related if they are subject to common control or common significant influence.
Fair
value of financial instruments:
The
carrying value of the Company’s financial instruments: receivables and amount due to a director approximate at their fair
values because of the short-term nature of these financial instruments.
The
Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”),
with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value
hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level
1: Observable inputs such as quoted prices in active markets;
Level
2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level
3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Recent
accounting pronouncements
In
May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts
with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. In August 2015,
the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays
the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the
original effective date. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers
(Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation
guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether
it controls a specified good or service before it is transferred to the customers. The new standard further requires new disclosures
about contracts with customers, including the significant judgments the company has made when applying the guidance. We will adopt
the new standard effective December 1, 2018, using the modified retrospective transition method.
In
June 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic
915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in
Topic 810, Consolidation,” (“ASU 2014-10”). ASU 2014-10 removes the definition of a development stage entity
from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities
from GAAP. In addition, ASU 2014-10 eliminates the requirements for development stage entities to (1) present inception-to-date
information in the statements of operations, cash flows, and stockholders’ equity, (2) label the financial statements as
those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged,
and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been
in the development stage. ASU 2014-10 is effective for annual reporting periods beginning after December 15, 2014, and interim
periods therein. Early adoption is permitted. The Company has elected to adopt ASU 2014-10 effective with this registration statement
on Form S-1 and its adoption resulted in the removal of previously required development stage disclosures.
In
October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other
than Inventory (ASU 2016-16), which requires companies to recognize the income-tax consequences of an intra-entity transfer of
an asset other than inventory. This guidance will be effective for us in the first quarter of 2018, with the option to adopt it
in the first quarter of 2017. We currently anticipate adopting the new standard effective January 1, 2018, and do not expect the
standard to have a material impact on our financial statements.
In
November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU
2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in
cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash
flows. This guidance will be effective for us in the first quarter of 2018 and early adoption is permitted. We are still evaluating
the effect that this guidance will have on our financial statements and related disclosures.
The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption
of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
3.
GOING CONCERN UNCERTAINTIES
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The company having
accumulated deficit of $74,835 and $69,005 as of February 29, 2020 and November 30, 2019 respectively. For three months ended
February 29, 2020 and February 28, 2018, the company has net loss of $5,830 and $4,944 respectively.
While
the Company is attempting to generate revenues, the Company’s cash position may not be significant enough to support the
Company’s daily operations. While the Company believes in the viability of its strategy and in its ability to raise additional
funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon
its ability to achieve profitable operations or obtain adequate financing.
These
and other factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after
the date that financial statements are issued. These financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result
in the Company not being able to continue as a going concern.
4.
AMOUNT DUE TO A DIRECTOR
As
of February 29, 2020, and November 30, 2018, the company has a loan from sole director of $39,567 and $25,065 respectively, which
is unsecured and non-interest bearing with no fixed terms of repayment.
For
the three months period ended February 29, 2020, our director has paid on behalf of the Company, expenses amounted to $14,502.
Currently,
our office is provided by our director, Seah Chia Yee, without charge.
Our
director, Seah Chia Yee, has not been compensated for the services.
5.
PREPAYMENT
As
of February 29, 2020, the company has a prepayment of $1,360, of which included prepaid Edgar filing fee and company renewal agent
fee.
As
of November 30, 2019, the Company has a prepayment of $2,268, of which included prepaid Edgar filing fee and company renewal agent
fee.
6.
PROPERTY AND EQUIPMENT, NET
|
|
As of
February 29, 2020
|
|
|
As of
November 30, 2019
|
|
|
|
|
(Unaudited)
|
|
|
|
(Audited)
|
|
Office equipment
|
|
$
|
2,709
|
|
|
$
|
2,709
|
|
|
|
|
2,709
|
|
|
|
2,709
|
|
|
|
|
|
|
|
|
|
|
Less: Accumulated depreciation
|
|
|
(1,120
|
)
|
|
|
(985
|
)
|
Total
|
|
$
|
1,589
|
|
|
$
|
1,724
|
|
Depreciation,
classified as operating expenses, was $135 and $136 respectively for three months ended February 29, 2020 and February 28, 2019.
7.
ACCRUED EXPENSES
As
of February 29, 2020 and November 30, 2019, the company has an outstanding accrued expense as following:
|
|
As of
February 29, 2020
|
|
|
As of
November 30, 2019
|
|
|
|
|
(Unaudited)
|
|
|
|
(Audited)
|
|
Accrued audit fee
|
|
|
-
|
|
|
|
9,800
|
|
Accrued reissuance audit opinion
|
|
|
-
|
|
|
|
3,000
|
|
Accrued transfer agent fee
|
|
|
223
|
|
|
|
150
|
|
Accrued review fee
|
|
|
3,000
|
|
|
|
-
|
|
Total
|
|
$
|
3,223
|
|
|
$
|
12,950
|
|
8.
CONCENTRATIONS OF RISK
Since
the company has not generated any revenue nor incurring any cost of sales for the three months ended February 29, 2020 and February
28, 2019, the company has no concentration of risk on customer or supplier.
9.
COMMON STOCK
On
August 21, 2017, the Company issued 4,000,000 shares of restricted common stock, each with a par value of $0.001 per share, to
Mr. Seah for initial working capital of $4,000.
From
June 1, 2018 to August 31, 2018, the Company sold a total of 825,000 initial public offering shares to 33 shareholders, all of
which reside in China, Hong Kong and Malaysia, at a price of $0.04 per share. The total proceeds to the Company amounted to a
total of $33,000. The proceeds will be used as working capital.
As
of February 29, 2020, we have authorized capital stock consisting of 75,000,000 shares of common stock, $0.001 par value per share
of which 4,825,000 shares of common stock were issued and outstanding.
10.
SUBSEQUENT EVENTS
In
accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure
of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events
or transactions that occurred after February 29, 2020 up through the date the Company issued the financial statements.