Company: QSJC
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001683168-25-001892
Chunk: 593

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 8
Chunk 593
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 markets with
insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable
or can be derived principally from, or corroborated by observable market data.

 Level 3

Level 3 applies to assets or liabilities
for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the
assets or liabilities.

(j) Fair Value of Financial Instruments

The Company’s financial instruments consist
primarily of cash and cash equivalents, other receivables, accounts payable, and other payables and accruals. The carrying amounts of
these balances approximate their fair values due to the short-term maturities of these instruments.

(k) Income Taxes

Income tax expense comprises current and deferred
taxation and is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive
income or equity, in which case it is recognized directly in other comprehensive income or equity. Current tax is the expected tax payable
on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable
with respect to previous periods.

The Company accounts for income taxes using the
asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the
financial reporting and tax basis of assets and liabilities, net of operating loss carry forwards and credits, by applying enacted tax
rates that will be in effect for the period in which the differences are expected to reverse. The effect on deferred taxes of a change
in tax rates is recognized in the statements of operations in the period of change.

     F-9 

The Company accounts for uncertain tax positions
by reporting liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return.
Tax benefits are recognized from uncertain tax positions when the Company believes that it is more likely than not that the tax position
will be sustained on examination by the tax authorities based on the technical merits of the position. The Company recognizes interest
and penalties if any, related to unrecognized tax benefits in income tax expenses.

(l) Comprehensive Income or Loss

Comprehensive income or loss includes net income
and foreign currency translation adjustments. Comprehensive income or loss is reported in the statements of comprehensive income or loss.

(m) Concentration of Credit Risk

Financial instruments that potentially expose
the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents and other rece