Company: TCRG
Filing Date: 2025-07-21
Form Type: 10-Q
Source: 0001185185-25-000810
Chunk: 45

Company: Cannaisseur Group Inc.
Filing Date: 2025-07-21
Form: 10-Q
Item: Item 2
Chunk 45
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 financial
condition and results of operations are based on our financial statements that have been prepared under accounting principle generally
accepted in the United States of America. The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.

A summary of significant accounting policies is
included in Note 2 to the consolidated financial statements included in this Registration Statement. Of these policies, we believe that
the following items are the most critical in preparing our financial statements.

Consolidation Policy

TCRG relied upon the guidance of ASC 250 Accounting
Changes and Error Corrections (“ASC 250”) and ASC 805 Business Combinations (“ASC 805”) in accounting
for and presenting acquisition of Atlanta CBD. Pursuant to ASC 805-50-05-5, the pooling-of-interests method of accounting provides relevant
guidance when an exchange of shares between entities under common control results in a change in the reporting entity. Under the pooling-of-interests
method, the transferred assets and liabilities are recorded at their historical carrying amounts, and the equity accounts of the separate
entities are combined. Pursuant to ASC 805-50-45-2, the transaction should be presented as if it occurred on the first day of the period
reported; accordingly, we have reported the Atlanta CBD transaction as if it occurred on January 1, 2020.

20

Inventory

Inventories are stated at the lower of cost or
market. Atlanta CBD periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on
its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Inventory is based upon the average
cost method of accounting.

Revenue Recognition

TCRG recognizes revenue in accordance with ASC
Topic 606, Revenue From Contracts With Customers. ASC Topic 606 requires companies to recognize revenue in a manner that depicts
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services. In addition, the standard requires disclosures of the nature, amount, timing and uncertainty
of revenue and cash flows arising from contracts with customers. Atlanta CBD sells CBD related products in a retail location