Company: QSJC
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001683168-25-001892
Chunk: 356

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 4
Chunk 356
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    (v)
    recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to
contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services
it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews
the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct.
The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when
the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred
to customers at a point in time, typically upon delivery or service being rendered.

Contract liabilities consist of advance from customers
related to cash received from customers for the future transfer of goods to customers. The balance of advance from customers represents
unfulfilled performance obligations in the sales agreement, i.e. products that have not yet been delivered. Once the related products
have been delivered, the amount in the advance from customers account is shifted to a revenue account. As of December 31, 2024, and 2023,
the balance of advance from customers was $51,237 and $142,889, respectively. For the year ended December 31, 2024, $142,889 of revenue
recognized was included in the Company’s advance from customers’ balance as of December 31, 2023.

For all reporting periods, the Company has not
disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year
or less, which is an optional exemption that is permitted under the adopted rules.

(g) Foreign Currency Translation

The Company’s reporting currency is the
U.S. dollar and the functional currency is the Chinese Renminbi (“RMB”). All assets and liabilities are translated at exchange
rates at the balance sheet date and revenue and expenses are translated at the average yearly exchange rates and equity is translated
at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign
exchange adjustments to other comprehensive income, a component of equity.

Transactions in currencies other than the functional
currencies during the year are converted into the applicable functional currencies at the applicable rates of exchange prevailing at the
dates of the transactions. Exchange gains and losses are recognized in the statements of operations.

The exchange rates utilized as follows: