Company: QSJC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001683168-25-008383
Chunk: 39

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 39
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Level 2 applies to assets or liabilities for
which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, such as
quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in 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.

     10 

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.

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