Company: QSJC
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001683168-25-001892
Chunk: 168

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1B
Chunk 168
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 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts
with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for
those goods. The Company applies the following five-step model in order to determine this amount:

    (i)
    identification of the goods and services in the contract;

    (ii)
    determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract;

    (iii)
    measurement of the transaction price, including the constraint on variable consideration;

    (iv)
    allocation of the transaction price to the performance obligations; and

    (v)
    recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to
contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services
it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews
the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct.
The Company recognizes as revenue the amount of the transaction price that is allocated to the 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.

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. 

Recent accounting pronouncements

In June 2016, the FASB issued ASU No. 2016-13,
Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard requires
a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected.
The allowance for credit losses is a