Company: NCL
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001575872-25-000540
Chunk: 91

Company: Northann Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 91
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 position will be sustained upon examination by the tax authorities. The Company considers and estimates interest and penalties related to the gross unrecognized tax benefits and includes as part of its income tax provision based on the applicable income tax regulations. The Company did not accrue any liability, interest or penalties related to uncertain tax positions in the provision for income taxes line of the consolidated statements of operations for the six months ended June 31, 2025. The Company had no uncertain tax position for the six months ended June 30, 2025 and June 30, 2024. Foreign Currency and Foreign Currency Translation The functional currency of the Company is the Chinese Yuan (“RMB”), as their functional currencies. An entity’s functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date. Gains and losses resulting from foreign currency re-measurement are included in the statements of comprehensive loss. The consolidated financial statements are presented in U.S. dollars. Assets and liabilities are translated into U.S. dollars at the current exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effect during the reporting period. Stockholders’ equity accounts are translated using the historical exchange rates at the date the entry to stockholders’ equity was recorded, except for the change in retained earnings during the period, which is translated using the historical exchange rates used to translate each period’s income statement. Differences resulting from translating functional currencies to the reporting currency are recorded in accumulated other comprehensive income in the consolidated balance sheets. Translation of amounts from RMB and HKD into U.S. dollars has been made at the following exchange rates: Balance sheet items, except for equity accounts        June 30, 2025  RMB7.1636 to $1   HKD7.7787 to $1 December 31, 2024  RMB7.0950 to $1