Company: SNBH
Filing Date: 2025-04-16
Form Type: 10-K
Source: 0001731122-25-000581
Chunk: 337

Company: SENTIENT BRANDS HOLDINGS INC.
Filing Date: 2025-04-16
Form: 10-K
Item: Item 4
Chunk 337
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, assets
and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical
accounting policies affect our more significant judgments and estimates used in the preparation of the consolidated financial statements.

22

Revenue Recognition

We recognize revenue when
persuasive evidence of an arrangement exists, delivery has occurred or products have been sold, the purchase price is fixed or determinable
and collectability is reasonably assured.

Our customers place orders
for our products pursuant to their purchase orders and we are paid by our customers pursuant to our invoices. Each invoice calls for a
fixed payment in a fixed period of time. We recognize revenue by selling our products under our customers’ purchase orders and our
related invoices to our customers. Revenue related to the sales of our products to our customers is recognized as the products are sold
and amounts are paid, using the straight-line method over the term of the sales transaction. Prepayments, if any, received from customers
prior to the products being delivered are recorded as advance from customers. In these cases, when the products are sold, the amount recorded
as advance from customers is recognized as revenue.

Income Taxes

We are governed by the income
tax laws of the United States. Income taxes are accounted for pursuant to ASC 740 “Accounting for Income Taxes,” which is
an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences
of events that have been recognized in our financial statements or tax returns. The charge for taxes is based on the results for the period
as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.

Deferred tax is accounted
for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount
of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit.
In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to
the extent that it is probably that taxable profit will be available against which deductible temporary differences can be utilized.

Deferred tax is calculated
using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged
or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred
tax is changed to