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INCOME TAXES

12 Months Ended

Dec. 31, 2014

8.	INCOME TAXES

	The Company accounts for income taxes in accordance with the provisions of SFAS No. 109 (ASC Topic 740”), “Accounting for Income Taxes”.

	Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the effect of temporary differences between assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. In accordance with SFAS No. 109, “Accounting for Income Taxes”, these deferred income taxes are measured by applying currently enacted tax laws.

	The Company has a United States federal net operating loss carryforward of approximately $(5.24) million expiring in the years 2021 - 2025. The tax benefit of this net operating loss has been offset by a full valuation allowance. A portion of the net operating loss carryforward will be subject to a limitation due to the “Change of ownership provisions” under Section 382 of the Internal Revenue Code and similar state provisions.

	Net operating income (loss) carry forwards are allowed under the Hong Kong and Chinese governments’ tax systems. In China, the previous five years’ net operating loss are allowed to be carried forward to offset future taxable income. In Hong Kong, the net operating loss can be carried forward indefinitely to offset future taxable income.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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