Company: SISI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006895
Chunk: 34

Company: SHINECO, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 the measurement of the fair value of the
asset or liability.

The carrying value of financial instruments
included in current assets and liabilities approximate their fair values because of the short-term nature of these instruments.

Income Taxes

Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between the unaudited condensed consolidated financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in
the period that includes the enactment date. A valuation allowance is established, when necessary, to reduce deferred tax assets to the
amount expected to be realized.

    15

The provisions of ASC 740-10-25, “Accounting
for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for unaudited condensed consolidated financial statement
recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This ASC also provides guidance on the
recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting
for interest and penalties associated with tax positions, and related disclosures. The Company did not have any uncertain tax positions
as of December 31, 2024 and June 30, 2024. The Company had not provided deferred taxes for undistributed earnings of non-U.S. subsidiaries
as of December 31, 2024, as it is the Company’s policy to indefinitely reinvest these earnings in non-U.S. operations. Quantification
of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable.

The statute of limitations for the Company’s
U.S. federal income tax returns and certain state income tax returns remains open for tax year 2022 and thereafter. As of December 31,
2024, the tax years ended December 31, 2020 through December 31, 2024 for the Company’s PRC subsidiaries remained open for statutory
examination by PRC tax authorities.

On December 22, 2017, the “Tax
Cuts and Jobs Act” (“The Act”) was enacted. Under the provisions of The Act, the U.S. corporate tax rate decreased
from 35% to 21%. As the