Company: MYCB
Filing Date: 2025-09-25
Form Type: 10-Q
Source: 0001640334-25-001709
Chunk: 12

Company: My City Builders, Inc.
Filing Date: 2025-09-25
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 accounted for separately. Lease components consist primarily of fixed rental payments, which represent scheduled rental amounts due under our leases. Non-lease components consist primarily of tenant recoveries representing reimbursements of rental operating expenses, including recoveries for utilities, repairs and maintenance and common area expenses. If the lease component is the predominant component, we account for all revenues under such lease as a single component in accordance with the lease accounting standard. Conversely, if the non-lease component is the predominant component, all revenues under such lease are accounted for in accordance with the revenue recognition accounting standard. Our operating leases qualify for the single component accounting, and the lease component in each of our leases is predominant. Therefore, we account for all revenues from our operating leases under the lease accounting standard and classify these revenues as rental income. We commence recognition of rental income related to the operating leases at the date the property is ready for its intended use by the tenant and the tenant takes possession or controls the physical use of the leased asset. Income from rentals related to fixed rental payments under operating leases is recognized on a straight-line basis over the respective operating lease terms. Amounts received currently but recognized as revenue in future periods are classified in other liabilities in our consolidated balance sheets. Revenue Recognition The Company recognizes revenue in accordance with Topic 606, which requires the Company to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606:  (i)Identify the contract, or contracts, with a tenant; (ii)Identify the performance obligations in the rental contract; (iii)Determine the transaction price; (iv)Allocate the transaction price to the performance obligations in the contract; (v)Recognize revenue when the Company satisfies a performance obligation. Rental income The Company generated rental income from operating leases, which is accounted for under ASC 842. Operating lease revenue is generally recognized on straight-line basis over the terms of the lease agreements. Cost of rental homes The cost of rental homes are expenses directly related to rental homes, such as lawncare, maintenance and repairs, management fees, utilities, insurance, and property taxes.

 F-9Table of Contents

General and administrative expenses General and administrative expenses primarily consist of office expenses, travel, meals and entertainment and insurance. Income Taxes The