Right-of-Use Assets and Lease Liabilities

3 Months Ended

Jun. 30, 2020

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

RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

NOTE 9. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

On April 1, 2019, the Company adopted FASB ASC 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.

In November 2017, Tianci Liangtian leased office space from November 20, 2017 to December 5, 2018 under an operating lease agreement (approximately 666 square meters). Under the terms of the lease, Tianci Liangtian paid approximately $1,592 in lease deposits and committed to make annual lease payments. In December 2018, Yuxingqi renewed the lease agreement. Under the terms, Yuxingqi committed to make annual lease payments of RMB290,000 (approximately US$42,000) for the period from December 6, 2018 to December 5, 2019. On December 20, 2019, Yuxingqi renewed the lease agreement. Under the terms, Yuxingqi committed to make annual lease payments of RMB290,000 (approximately US$42,000, including VAT tax) for the period from December 20, 2019 to December 19, 2020. RMB150,000 (approximately US$22,000) payment was paid on December 23, 2019. As of June 30, 2020, US$16,124 and US$18,682 was accounted as operating lease right-of-use assets and operating lease liabilities (current), respectively

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 impact of the adoption of the new lease standard included the recognition of right-of-use ("ROU") assets and lease liabilities. For the three months ended June 30, 2020 and 2020, the amortization was $9,652 and $10,027, respectively.

Operating leases are reflected on our balance sheet within ROU assets and the related current operating lease liabilities. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease agreement. ROU assets and liabilities are recognized at the commencement date, or the date on which the lessor makes the underlying asset available for use, based upon the present value of the lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectation regarding the terms.

As of June 30, 2020, the Company has the following amounts recorded on the Company's unaudited condensed consolidated balance sheet:

	As of June 30, 2020
	(Unaudited)
Assets
Right-of-use asset(non-current)	$	16,124
Total	$	16,124
Liabilities
Lease liability(current)	$	18,682
Total	$	18,682

Office lease:
Remaining Lease Term	1 year, renewal option
Incremental borrowing rate		4.9	%

The components of lease expense were as follows:

	For the three months ended June 30, 2020
	(Unaudited)
Amortization of ROU Asset
Office Lease	$	9,652
Interest expense		-
Total lease expense	$	9,652

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

Year Ending March 31	Operating Leases (Unaudited)
2021	$	18,638
Thereafter		-
Total		18,638
Less: imputed interest		-
Total	$	18,638
Reconciliation to lease liabilities:
Lease liabilities - current		18,638
Lease Liabilities	$	18,638