Company: OCG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043484
Chunk: 148

Company: Oriental Culture Holding LTD
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 148
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 application is permitted. The
Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related
disclosures.

Except as mentioned above, the Company does not
believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s
consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.

Recently adopted accounting pronouncements

In November 2023, the Financial Accounting Standards
Board (FASB) issued a new Accounting Standards Update (ASU) to improve disclosures related to reportable segments. The amendments in ASU
2023-07 “ Segment Reporting - Improvements to Reportable Segment Disclosures” are effective for fiscal years
beginning after December 15, 2023, and for interim periods in fiscal years beginning after December 15, 2024. The new guidance applies
to all public entities that are following Topic 280 Segment Reporting requirements already, and these entities must apply the new requirements
retrospectively to all periods presented in their financial statements. The Company adopted this ASU for its consolidated financial statements
for its fiscal year of December 31, 2024.

Note 3 - Variable interest entity

On May 8, 2019, Oriental Culture WFOE entered
into Contractual Arrangements with Jiangsu Yanggu and its shareholders. The significant terms of these Contractual Arrangements are summarized
in “ Note 1 - Nature of business and organization” above. As a result, the Company classifies Jiangsu Yanggu and its subsidiaries
as VIEs. Please also see Note 14 - Commitments and Contingencies for uncertainties of VIE.

A VIE is an entity that has either a total equity
investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose
equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected
residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has
a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Oriental Culture WFOE
is deemed to have a controlling financial interest and is the primary beneficiary of Jiangsu Yanggu and its subsidiaries because it has
both of the following characteristics:

  (1)      The power to direct activities at