Right-of-Use Assets and Lease Liabilities

6 Months Ended

Jun. 30, 2022

Right-of-Use Assets and Lease Liabilities [Abstract]

RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

NOTE 5. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

On January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, “Leases” (“new lease standard”). The new lease standard was adopted using the optional transition method approach that allows for the cumulative effect adjustment to be recorded without restating prior periods. The Company has elected the practical expedient package related to the identification, classification and accounting for initial direct costs whereby prior conclusions do not have to be reassessed for leases that commenced before the effective date. As the Company will not reassess such conclusions, the Company has not adopted the practical expedient to use hindsight to determine the likelihood of whether a lease will be extended or terminated or whether a purchase option will be exercised.

Operating lease

In March 2022 Laidian leased office space under non-cancellable operating lease agreements. Under terms of the lease agreement, from April 2022, Laidian is committed to make lease payments of approximately $1,528 per month for 23 months. This office is used as office for Laidian.

The Company’s adoption of the new lease standard included new processes and controls regarding asset financing transactions, financial reporting and a system-related implementation required for the new lease standard. The Company’s accounting for finance leases (formerly referred to as capital leases prior to the adoption of the new lease standard) remained substantially unchanged. The impact of the adoption of the new lease standard included the recognition of right-of-use (“ROU”) assets and lease liabilities. The adoption of the new lease standard resulted in additional net lease assets and net lease liabilities of $26,970 and $26,970, respectively, as of June 30, 2022. 

As of June 30, 2022, the Company has the following amounts recorded on the Company’s unaudited condensed consolidated balance sheet: 

	June 30, 2022
	(Unaudited)
Assets
Operating lease assets	$	26,970
Total	$	26,970
Liabilities
Operating lease liabilities- Current		16,790
Operating lease liabilities- Long-term		10,180
Total	$	26,970

Future annual minimum lease payments, for non-cancellable operating leases are as follows:

Year ending June 30	Amount $
2022		8,292
2023		17,205
2024		1,473
Total		26,970

The company has recorded operating lease expense of $6,112 and $280,523 ($nil for the Company, $280,523 for discontinued operations) for three months ended June 30, 2022 and 2021, and recorded operating lease expense of $6,122 and $549,727 ($nil for the Company, $549,727 for discontinued operations) for six months ended June 30, 2022 and 2021, respectively.

At June 30, 2022 right-of-use assets, consist of:

	June 30, 2022 (Unaudited)
Lease assets	$	33,082
Accumulated amortization		(6,112	)
Total right-of-use assets, net	$	26,970