| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This
summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. The financial
statements and notes are the responsibility of the Company’s management. These accounting policies conform to accounting principles
generally accepted in the United States of America (“US GAAP”) and have been consistently applied in the preparation of the
financial statements. This disclosure should be read in conjunction with our audited financial statements for the year ended July 31,
2023, including footnotes, contained in our Annual Report on Form 10-K. Organization Hartford
Great Health Corp. was originally incorporated in the State of Nevada on April 2, 2008 under the name PhotoAmigo, Inc. It changed its
name to Hartford Great Health Corp. on August 22, 2018 and since then we have been engaged in activities to formulate and implement our
business plans. Through
its wholly owned subsidiary - Hangzhou Hartford Comprehensive Health Management, Ltd (“HZHF) and HZHF’s 60 90 The
Company started to engage in early childhood education industry at Hartford International Education Technology Co., Ltd (“HF Int’l
Education”). On July 24, 2019 and March 23, 2020, HF Int’l Education established two 100 96 4 Impacted
by the government regulation implemented in education industry and the restrictions posted by the Chinese government to control the pandemic
in China since 2021, to avoid further operation losses, on August 1, 2022, HFSH entered a contract with a related party, Shanghai Oversea
Chinese Culture Media Ltd. (“SH Oversea”), to sell 90 900 5,850 100 1,000 6,500 Basis
of Presentation The
consolidated financial statements include the accounts of Hartford Great Health Corp, its wholly-owned subsidiaries and subsidiaries
in which it has a controlling interest. The Company reports noncontrolling interests of the consolidated entities as a component of equity
separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated
subsidiaries have been eliminated in the consolidation. The Company’s net income (loss) excludes income (loss) attributable to
the noncontrolling interests. Use
of Estimates The
preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions
that affect the amounts of assets and liabilities, the identification and disclosure of impaired assets and contingent liabilities at
the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from
those estimates. Income
Taxes The
Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset
and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards.
Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences
are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more
likely than not to be realized. The
Tax Reform Act permanently reduces the U.S. corporate income tax rate to a flat 21% rate, effective January 1, 2018. In addition, the
2017 Tax Act also creates a new requirement that certain income (i.e., Global Intangible Low-Taxed Income (“GILTI”)) earned
by controlled foreign corporations (“CFCs”) must be included in the gross income of the CFCs’ U.S. shareholder income.
The tax law in PRC applies an income tax rate of 25% to all enterprises. The Company’s subsidiary does not receive any preferential
tax treatment from local government. Revenue
Recognition The
Company adopted ASC Topic 606 Revenue from Contracts with Customers (“Topic 606) on August 1, 2019, applying the modified retrospective
method to all contracts that were not completed as of August 1, 2019. Revenue is recognized when control of promised goods or services
is transferred to our customers in an amount of consideration to which we expect to be entitled to in exchange for those goods or services.
We follow the five steps approach for revenue recognition under Topic 606: (i) identify the contract(s) with a customer, (ii) identify
the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance
obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation. Billings to customers for which
services are not rendered are considered deferred revenue. ASC 606 has no material impacts on the Company’s financial positions.
The Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products or
providing services to a customer. The Company’s general payment terms are short-term in duration. The Company does not have significant
financing components or payment terms.
a. Early
childhood education services: HF Int’l Education generates revenue from childhood education
classes provided to its customers. The educational services consist of parent-child and bilingual
childcare classes. Each contract of educational classes is accounted for as a single performance
obligation which is satisfied proportionately over the service period. Tuition fee is generally
collected in advance and is initially recorded as deferred revenue and transferred to contract
liabilities after trial period. Refunds are provided to parents if they decide within the
trial period that they no longer want to take the class. After the trial period, if a parent
withdraws from a class, usually only that unearned portion of the fee is available to be
returned. Nil
b. Hospitality
services: HZLJ generates revenue primarily from the room rentals, sale of food and beverage
and other miscellaneous hospitality services. The Company recognizes room rental and services
daily as services are provided. Under ASC 606, the pattern and timing of recognition of income
from hotel facility is consistent with the prior accounting model. Impacted
by the Covid-19 pandemic and Chinese regulation on education industry, both early childhood education services and hospitality services
have been sold on August 1 2022. Thus, there was no revenue recognized from the two-revenue-stream for the three months ended October
31, 2023 and 2022, respectively. See Note 3 Acquisitions and Disposals. Recent
Accounting Pronouncements Recently
adopted accounting pronouncements In
June 2016, the FASB issued ASU No. 2016-13, (Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on
Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss”
model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable
forecasts, rather than the “incurred loss” model. This guidance amends the accounting for credit losses for most financial
assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments.
The company adopted ASU 2016-13 on August 01, 2023. The adoption of ASU 2016-13 has no impact on the Company’s consolidated financial
statements. |
