PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2024

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets as follows between three and five years.

Long lived assets, including property and equipment, to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.

Adjustments for Consolidation and Elimination of Revaluation Reserve

In accordance with US GAAP requirements, the consolidated financial statements of Nika Pharmaceuticals, Inc. are prepared on a historical cost basis for property, plant, and equipment. Certain subsidiaries, which report under International Financial Reporting Standards (IFRS), apply the revaluation model to measure their property, plant, and equipment at fair value, with the resulting revaluation surplus recognized in equity as a revaluation reserve.

For the purposes of consolidation into the Group's US GAAP financial statements, any revaluation reserves recognized under IFRS are eliminated, and the affected assets are adjusted back to their historical cost basis in accordance with US GAAP. As a result, the revaluation reserve of $1,848,030, recorded in the standalone financial statements of the subsidiary, has been removed in the consolidated financial statements, and the related assets have been reported at their historical cost of $168,259. Additionally, any subsequent depreciation, amortization, or gains/losses on disposal of these assets are calculated based on the adjusted historical cost in compliance with US GAAP.

Property and equipment stated at cost, less accumulated depreciation consisted of the following:

		June 30,
		2024
Land	$	467,990
Buildings		2,955,328
Total	$	3,423,319

NIKA PHARMACEUTICALS, INC 10-Q