Company: IPSI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076595
Chunk: 21

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 21
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 criteria include circumstances in which (a) the economic characteristics and risks of the embedded
derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid
instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise
applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument
with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC
815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

p)Marketing
and advertising expenses

Marketing and advertising expenditure
incurred on promoting the Company’s previous products were expensed as incurred. Marketing and advertising costs amounted to $0 and
$73,167 for the three months ended June 30, 2025 and 2024, respectively, and $0 and $148,874 for the six months ended June 30, 2025
and 2024, respectively.

12

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited
Condensed Financial Statements

2ACCOUNTING
POLICIES AND ESTIMATES (continued)

q)Income Taxes

The Company is based in the U.S. and
currently enacted U.S. tax laws are used in the calculation of income taxes.

Income taxes are computed using the
asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the
differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates
and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected
to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense.
As of June 30, 2025 and December 31, 2024, there have been no interest or penalties incurred on income taxes.

r)Comprehensive
income

Comprehensive income is defined as the
change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from
investments from owners and distributions to owners. The Company does not have any comprehensive income (loss) for the periods presented.

s)Reclassification
of prior year presentation

Certain