Company: OCG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043484
Chunk: 130

Company: Oriental Culture Holding LTD
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 130
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  The Company disposed HKDAEx in December 2024 and recognized                                                                            

F-9

ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting
policies

Basis of presentation

The accompanying consolidated financial statements
were prepared in accordance with accounting principles generally accepted in the United States of America (“ U. S. GAAP”) and
information pursuant to the rules and regulations of the SEC.

Principles of consolidation

The consolidated financial statements include
the accounts of the Company, its subsidiaries, and their VIEs. All intercompany transactions and balances are eliminated in consolidation.

Use of estimates and assumptions

The preparation of consolidated financial statements
in conformity with U. S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated
financial statements include revenue recognition, allowance for credit losses, the useful lives of property and equipment and intangible
assets and impairment of long-lived assets. Actual results could differ from these estimates.

Foreign currency translation and transactions

The reporting currency of the Company is the U. S.
dollar. The functional currency for our holding company is the U. S. dollar. In the PRC, the Company conducts its businesses in the local
currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by
the People’s Bank of China at the end of the period. In Hong Kong, the Company conducts its business in the local currency, Hong
Kong dollar (HKD), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the Federal
Reserve at the end of the period. The statements of income and cash flows are translated at the average translation rates during the reporting
periods and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in
accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the functional currency are included in the results of operations as incurred.

F-10

ORIENTAL CULTURE HOLDING LTD. AND