Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Income Taxes (Tables)

v3.20.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Schedule of Loss from Continuing Operations before Income Taxes Generated in Jurisdictions

Loss from continuing operations before income taxes were generated in the following jurisdictions:

 

 

 

Nine months

ended

December 31

 

 

Twelve months

ended

December 31

 

 

Twelve months

ended

December 31

 

 

2017

 

 

2018

 

 

2019

 

 

RMB

 

 

RMB

 

 

RMB

Cayman Islands and British Virgin Islands

 

 

(39,725,254

)

 

 

(29,296,296

)

 

(23,094,955)

PRC

 

 

(35,150,223

)

 

 

(39,680,573

)

 

(118,145,074)

Hong Kong

 

 

(37,472

)

 

 

923,395

 

 

(21,586)

Loss before continuing operations before income taxes

 

 

(74,912,949

)

 

 

(68,053,474

)

 

(141,261,615)

Schedule of Income Tax Expense

Income tax expense recognized in the consolidated statements of comprehensive income (loss) consists of the following:

 

 

 

Nine months

ended

December 31

 

 

Twelve months

ended

December 31

 

 

Twelve months

ended

December 31

 

 

2017

 

 

2018

 

 

2019

 

 

RMB

 

 

RMB

 

 

RMB

PRC

 

 

 

 

 

 

 

 

 

 

Current income tax expense

 

 

 

 

 

 

 

905,078

Deferred income tax benefit

 

 

(2,109,096

)

 

 

 

 

(8,054,197)

Total income tax benefit

 

 

(2,109,096

)

 

 

 

 

(7,149,119)

 

Schedule of Difference Between Actual Income Tax Expense and Amount Computed by Applying PRC Statutory Income Tax Rate to Earnings before Income Taxes

The actual income tax expense (benefit) reported in the consolidated statements of comprehensive income (loss) differs from the respective amount computed by applying the PRC statutory income tax rate of 25% for each of nine months ended December 31, 2017, the year ended December 31, 2018 and the year ended December 31, 2019 to earnings before income taxes due to the following:

 

 

 

Nine months

ended

December 31

 

 

Twelve months

ended

December 31

 

 

Twelve months

ended

December 31

 

 

2017

 

 

2018

 

 

2019

 

 

RMB

 

 

RMB

 

 

RMB

Computed “expected” income tax benefit

 

 

(18,728,237

)

 

 

(17,013,369

)

 

(35,315,404)

Increase (decrease) in valuation allowance

 

 

9,261,477

 

 

 

(14,570,083

)

 

23,171,671

Entities not subject to income tax

 

 

8,244,168

 

 

 

4,896,732

 

 

4,576,771

Non-deductible expenses

 

 

 

 

 

 

 

 

 

 

Entertainment

 

 

98,299

 

 

 

255,843

 

 

394,380

Share-based compensation

 

 

1,696,514

 

 

 

2,427,342

 

 

1,202,364

Bad debt loss

 

 

(96,683

)

 

 

25,206

 

 

Additional deduction of research and development costs

 

 

(951,062

)

 

 

(447,525

)

 

(240,404)

Withholding tax related to undistributed earnings

 

 

(2,109,096

)

 

 

 

 

Gain from discharge of intercompany payables (a)

 

 

 

 

 

25,594,493

 

 

Investment loss from sale of non-redeemable non-controlling interests (b)

 

 

 

 

 

(1,725,000

)

 

Other

 

 

475,524

 

 

 

556,361

 

 

(938,497)

Actual income tax benefit

 

 

(2,109,096

)

 

 

 

 

(7,149,119)

 

 

(a)

The gain from discharge of intercompany payables represents the gain recognized from the discharge of payables of ATA Education due to ATA Learning, Zhongxiao Zhixing and ATA BVI. These payables were waived in accordance with the terms agreed in the ATA Online Sale Transaction.

 

(b)

The investment loss from sale of non-redeemable non-controlling interests represents the investment loss recognized from the transfer of 24% equity shares of Muhua Shangce to a limited partnership named Ningbo Meishan Bonded Port Area Zunming Investment Management Center (Limited Partnership) (“Limited Partnership”) from ATA Education for the year ended December 31, 2018. See note 16.

Schedule of Components of Deferred Income Tax Assets and Liabilities

The tax effects of the Group’s temporary differences that give rise to significant portions of the deferred income tax assets and liabilities are as follows:

 

 

 

December 31,

2018

 

 

December 31,

2019

 

 

RMB

 

 

RMB

Deferred income tax assets:

 

 

 

 

 

 

Tax loss carry forwards

 

 

14,082,622

 

 

28,153,853

Impairment loss of long-term investments

 

 

4,132,700

 

 

10,148,827

Lease liability

 

 

 

 

8,264,034

Impairment loss of intangible assets and other non-current assets

 

 

 

 

2,233,110

Provision for other receivables

 

 

 

 

1,396,914

Accrued expenses and other payables

 

 

2,946,135

 

 

4,213,877

Property and equipment, net

 

 

551,634

 

 

702,523

Donation

 

 

250,000

 

 

2,768,750

Total gross deferred income tax assets

 

 

21,963,091

 

 

57,881,888

Less: valuation allowance

 

 

(21,275,591

)

 

(44,713,570)

Total deferred income tax assets, net

 

 

687,500

 

 

13,168,318

Deferred income tax liabilities:

 

 

 

 

 

 

Intangible assets

 

 

 

 

32,657,242

Right-of-use assets

 

 

 

 

10,196,572

Deferred revenues

 

 

 

 

7,091,422

Change in fair value of long-term investment

 

 

687,500

 

 

Total gross deferred income tax liabilities

 

 

687,500

 

 

49,945,236

Net deferred income tax assets

 

 

 

 

11,464,891

Net deferred income tax liabilities

 

 

 

 

48,241,809

 

Summary of Movements of Valuation Allowance

The movements of the valuation allowance are as follows:

 

 

 

Nine months

ended

December 31

 

 

Twelve months

ended

December 31

 

 

Twelve months

ended

December 31

 

 

2017

 

 

2018

 

 

2019

 

 

RMB

 

 

RMB

 

 

RMB

Balance at the beginning of the period

 

 

26,584,197

 

 

 

35,845,674

 

 

21,275,591

Additions

 

 

9,261,477

 

 

 

11,024,410

 

 

23,437,979

Reduction due to gain from discharge of intercompany payables

 

 

 

 

 

(25,594,493

)

 

Balance at the end of the period

 

 

35,845,674

 

 

 

21,275,591

 

 

44,713,570