Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 145

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 19
Chunk 145
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 consolidated financial statements and accompanying notes.
Significant accounting estimates include, but not limited to, the allowance for credit loss, lower of cost or net realizable value of
inventory, useful lives of long-lived assets, impairment of long-lived assets and valuation allowance on deferred tax assets. Changes
in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences
may be material to the consolidated financial statements.

MKDWELL
TECH INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(In
U. S. dollars, except share and per share data)

  S UMMARY                                      
  OF SIGNIFICANT ACCOUNTING POLICIES-Continued  
 ────────────────────────────────────────────────

(d) Functional currency and foreign currency translation

The
functional and reporting currency of the Company is the United States Dollar (“ US$”). The Company’s operating subsidiaries
in Taiwan, China and mainland China use their respective currencies New Taiwan dollar (“ NT$”) and Renminbi (“ RMB”)
as their functional currencies.

The
financial statements of MKD BVI and its subsidiaries, other than subsidiaries with functional currency of US$, are translated into US$
using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and
expense items. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable
rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange
at the time of capital contribution.

Because
cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated
statements of cash flows will not necessarily agree with changes in the corresponding balances on the condensed consolidated balance
sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component
of accumulated other comprehensive income included in consolidated statements of changes in shareholders’ equity (deficit). Gains
and losses from foreign currency transactions are included in the Company’s consolidated statements of operations and comprehensive
loss.

The
following table outlines the currency exchange rates that were used in preparing the consolidated financial statements:

SCHEDULE OF CURRENCY EXCHANGE RATES

                   December                                    December                                    December                                
                   31, 2022                                    31, 2023                                    31, 2024                                
                   Year-end              Average               Years-ended           Average               Years