Company: LDDD
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001213900-25-042963
Chunk: 12

Company: Longduoduo Co Ltd
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 12
---
; however, actual results could differ from those estimates. Significant items subject to
such estimates and assumptions include the inventory valuation allowance and the treatment of the shares issued. These estimates are often
based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual
results could differ from these estimates.

F-6

LONGDUODUO COMPANY LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2025 AND
MARCH 31, 2024

(UNAUDITED)

E. Functional
currency and foreign currency translation

An entity’s functional currency is the currency
of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily
generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators,
such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency
of the Company is the Chinese Renminbi (“RMB’), except the functional currency of LDDJK is the Hong Kong Dollar and the functional
currency of Longduoduo and LDD is the United States Dollar (“US Dollars” or “$”). The reporting currency of these
consolidated financial statements is in US Dollars.

The financial statements of Longduoduo’s
subsidiaries, which are prepared using the RMB, are translated into the Company’s reporting currency, the US Dollar. Assets and
liabilities are translated using the exchange rate at each reporting period end date. Revenue and expenses are translated using weighted
average rates prevailing during each reporting period, and stockholders’ equity (deficit) is translated at historical exchange rates.
Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income or expense.

Transactions denominated in currencies other than
the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions.
Foreign currency exchange gains and losses resulting from these transactions are included in operations.

The exchange rates used for foreign currency translation are as follows:

    For the Nine Months Ended 
March 31,

    2025

    2024

    (USD to RMB/USD to HKD)

    (USD to RMB/USD to HKD)

    Assets and liabilities
     
    period end exchange rate

    7.2579/