Company: QSJC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001683168-25-008383
Chunk: 8

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 8
---
 respective performance obligation when the performance
obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at
a point in time, typically upon delivery or service being rendered.

Contract liabilities consist of advance from customers
related to cash received from customers for the future transfer of goods to customers. The balance of advance from customers represents
unfulfilled performance obligations in the sales agreement, i.e. products that have not yet been delivered. Once the related products
have been delivered, the amount in the advance from customers account is shifted to a revenue account. As of September 30, 2025 and December
31, 2024, the balance of advance from customers was $2,809 and $51,237, respectively. For the nine months ended September 30, 2025 and
2024, $51,237 and $142,889 of revenue recognized was included in the Company’s advance from customers’ balance as of December
31, 2024 and 2023, respectively.

For all reporting periods, the Company has not disclosed
the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less,
which is an optional exemption that is permitted under the adopted rules. 

(g) Foreign Currency Translation

The Company’s reporting currency is the U.S.
dollar and the functional currency is the Chinese Renminbi (“RMB”). All assets and liabilities are translated at exchange
rates at the balance sheet date and revenue and expenses are translated at the average exchange rates for the reporting period and equity
is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included
in foreign exchange adjustments to other comprehensive income, a component of equity.

Transactions in currencies other than the functional
currencies during the year are converted into the applicable functional currencies at the applicable rates of exchange prevailing at the
dates of the transactions. Exchange gains and losses are recognized in the statements of operations.

The exchange rates utilized as follows:

    Schedule of exchange rates 

    September 30, 2025  
    September 30, 2024 
  
    Period-end RMB exchange rate 
     7,12  
     7.02 
  
    Annual average RMB exchange rate 
     7.22  
     7.19 

No representation is made that the RMB amounts could
have been, or could be, converted into U.S. dollars