Company: QSJC
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001683168-25-006089
Chunk: 27

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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 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 June 30, 2025 and December
31, 2024, the balance of advance from customers was $58,628 and $51,237, respectively. For the three and six months ended June 30, 2025
and 2024, $nil, $nil, $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. 

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.

 21 

Recent accounting pronouncements

In October 2021, the FASB issued ASU No. 2021-08,
“Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”
(“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract
liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition
and measurement