Company: QSJC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001683168-25-008383
Chunk: 37

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 37
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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. As of September 30, 2025 and December
31, 2024, the balance of advance from customers was $2,809 and $51,237, respectively. For the nine months ended September 30, 2025 and
2024, $51,237 and $142,889 of revenue recognized was included in the Company’s advance from customers’ balance as of December
31, 2024 and 2023, respectively.

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. 

(g) Foreign Currency Translation

The Company’s reporting currency is the U.S.
dollar and the functional currency is the Chinese Renminbi (“RMB”). All assets