Note 3 - Principals of Consolidation

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Consolidation [Text Block]

3. Principles of Consolidation .

The consolidated financial statements include the accounts of the Company, and ACTS Global which is consolidated under the variable interest entities (“VIE”) provisions of ASC

810,

“Consolidation” (“ASC

810”

). Inter-company balances and transactions have been eliminated upon consolidation.

The Company applies the provisions of ASC

810

which provides a framework for identifying VIEs and determining when a company should include the assets, liabilities, non-controlling interests and results of activities of a VIE in its consolidated financial statements.

In general, a VIE is a corporation, partnership, limited-liability corporation, trust, or any other legal structure used to conduct activities or hold assets that either (

1

) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (

2

) has a group of equity owners that is unable to make significant decisions about its activities, (

3

) has a group of equity owners that does

not

have the obligation to absorb losses or the right to receive returns generated by its operations or (

4

) the voting rights of some investors are

not

proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the entity’s activities (for example, providing financing or buying assets) either involve or are conducted on behalf of an investor that has disproportionately fewer voting rights.

ASC

810

requires a VIE to be consolidated by the party with an ownership, contractual or other financial interest in the VIE (a variable interest holder) that has both of the following characteristics: a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that could potentially be significant to the VIE.

A variable interest holder that consolidates the VIE is called the primary beneficiary. If the primary beneficiary of a variable interest entity (VIE) and the VIE are under common control, the primary beneficiary shall initially measure the assets, liabilities, and non-controlling interests of the VIE at amounts at which they are carried in the accounts of the reporting entity that controls the VIE (or would be carried if the reporting entity issued financial statements prepared in conformity with generally accepted accounting principles).