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| PREPAYMENTS AND DEPOSITS, NET | 8. PREPAYMENTS AND DEPOSITS, NET
Pursuant to the agreement, the Company remitted a deposit of CNY166,752,302, equivalent to $23,000,000 to Bi Cheng to be applied toward the cost of future investment, upon successful identification and execution of such an opportunity. As of the reporting date, due to the appreciation of the CNY, the deposit is valued at $24,531,431, and no investment has been finalized; hence, the funds remain unallocated to a specific investee.
The Company continues to monitor the progress of the investment activities and will reclassify the deposit as an investment asset once a definitive transaction has been completed and the associated rights and obligations have been transferred.
Other prepayments and deposits are mainly cash deposited or advanced to suppliers for future inventory purchases or service providers for future services. For any prepayments and deposits determined by management that such advances will not be in receipts of inventories, services, or refundable, the Company will recognize an allowance for credit loss for such balances. Management reviews its prepayments and deposits on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for credit losses after management has determined that the likelihood of collection is not probable.
AGAPE ATP CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Currency expressed in United States Dollars (“US$”), except for number of shares)
8. PREPAYMENTS AND DEPOSITS, NET (Continued)
Movements of allowance for credit loss are as follows:
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