SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Jul. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of subsidiaries and variable interest entities

As of July 31, 2020, the Company’s consolidated financial statements reflect the operating results of the following entities:


	Date of	Place of	% of
Name of Entity	Incorporation	Incorporation	Ownership	Principal Activities
Parent company:
ATIF	January 5, 2015	British Virgin Islands	Parent	Investment holding
Wholly owned subsidiaries of ATIF
ATIF HK	January 6, 2015	Hong Kong	100%	Investment holding
Huaya	May 20, 2015	PRC	100%	WFOE, Consultancy and information technology support
Variable interest entity of ATIF
Qianhai VIE	November 3, 2015	PRC	VIE	Listing and financial consulting services
Majority owned subsidiary of ATIF
LGC and its subsidiaries	August 21, 2018	Cayman Islands	51.2%	Multi-channel advertising, event planning and execution, film production and movie theater operation

Schedule of financial statement amounts and balances of the VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances

The following financial statement amounts and balances of the VIEs were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances:


	As of July 31,
	2020						2019
	Qianhai VIE		LMG VIE		Total		Qianhai VIE		LMG VIE		Total
Current assets	$	2,469,829	$	1,554,585	$	4,024,414	$	3,673,890	$	—	$	3,673,890
Non-current assets		184,740		5,493,284		5,678,024		68,375		—		68,375
Total assets		2,654,569		7,047,869		9,702,438		3,742,265		—		3,742,265
Current liabilities		1,441,148		5,736,358		7,177,506		980,364		—		980,364
Non-current liabilities		65,574		3,179,625		3,245,199		—		—		—
Total liabilities		1,506,722		8,915,983		10,422,705		980,364		—		980,364
Shareholders' equity (deficit)	$	1,147,847	$	(1,868,114)	$	(720,267)	$	2,761,901	$	—	$	2,761,901

The summarized operating results of the VIEs are as follows:


	For the years ended July 31,
	2020						2019		2018
	Qianhai VIE		LMG VIE		Total		Qianhai VIE		Qianhai VIE
Operating revenue	$	645,127	$	40,872	$	685,999	$	2,777,618	$	5,341,271
Income (loss) from operations	$	(1,471,095)	$	(4,781,593)	$	(6,252,688)	$	884,789	$	2,927,679
Income (loss) before income taxes	$	(1,562,037)	$	(4,857,484)	$	(6,419,521)	$	930,361	$	2,863,744
Net income (loss)	$	(1,562,037)	$	(4,933,748)	$	(6,495,785)	$	697,631	$	2,146,927

The summarized cash flow information of the VIEs are as follows:


	For the years ended July 31,
	2020						2019		2018
	Qianhai VIE		LMG VIE		Total		Qianhai VIE		Qianhai VIE
Net cash provided by (used in) operating activities	$	175,530	$	(662,795)	$	(487,265)	$	(3,380,071)	$	2,036,439
Net cash provided by (used in) investing activities	$	36,412	$	1,415,579	$	1,451,991	$	2,700,687	$	(2,898,916)
Net cash provided by (used in) financing activities	$	—	$	(734,347)	$	(734,347)	$	(14,626)	$	755,139

Schedule of estimated useful lives of assets

Property and equipment are stated at cost. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:


		Useful life
Furniture, fixtures and equipment		3-10 years
Transportation vehicles		3-5 years
Leasehold improvement		Lesser of useful life and lease term

Schedule of estimated useful lives of intangible assets

Intangible assets are stated at cost less accumulated amortization. The straight-line method is used to compute amortization over the estimated useful lives of the intangible assets, as follows:


		Useful life
Trade name		9.6 years
Customer relationship		6.2 years
Accounting software		4-10 years
Financial and news platform		15 years

Schedule of currency exchange rates

The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:


	July 31, 2020		July 31, 2019		July 31, 2018
Foreign currency	Period-end spot rate	Average rate	Period-end spot rate	Average rate	Period-end spot rate	Average rate
RMB: 1USD	0.1432	0.1420	0.1453	0.1463	0.1467	0.1538
HKD: 1USD	0.1290	0.1284	0.1278	0.1276	0.1274	0.1278

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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