Company: SISI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006895
Chunk: 182

Company: SHINECO, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 2
Chunk 182
---
Recognition

We
generate our revenue primarily through sales of Luobuma products, other agricultural products, healthy meals and rapid diagnostic and
other products, as well as providing logistic services and other processing services to external customers in accordance with ASC 606.
ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising
from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue
to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled
to receive in exchange for those goods or services recognized as performance obligations are satisfied.

With
the adoption of ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when all of the following five steps
are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the
transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance
obligation is satisfied. The Company has assessed the impact of the guidance by reviewing its existing customer contracts to identify
differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction
price, customer payments, transfer of control, and principal versus agent considerations. In accordance with ASC 606, the Company evaluates
whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. When
the Company is a principal, that the Company obtains control of the specified goods or services before they are transferred to the customers,
the revenue should be recognized in the gross amount of consideration to which it expects to be entitled in exchange for the specified
goods or services transferred. When the Company is an agent and its obligation is to facilitate third parties in fulfilling their performance
obligation for specified goods or services, the revenue should be recognized in the net amount for the amount of commission which the
Company earns in exchange for arranging for the specified goods or services to be provided by other parties. Based on the assessment,
the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope
of Topic 606 and therefore there was no material changes to the Company’s financial statements upon adoption of ASC 606.

50

More
specifically, revenue related to our products and services is generally recognized as follows:

Sales