(j) Revenue recognition The Company assesses appropriate revenue recognition policy for each type of operation according to ASC 605-45 Revenue represents the invoiced value of services rendered and receivable during the year. Revenue is recognized when all of the following criteria are met: o Persuasive evidence of an arrangement exists, o Delivery has occurred or services have been rendered, o The seller?s price to the buyer is fixed or determinable, and o Collectability is reasonably assured Revenue recognition policy for each of the major products and services: 1. Discounted call services for consumer (EMS) as follow: o Collaboration with CTT ? Redtone China is appointed as the sole distributor for EMS and will recognize revenue when airtime is utilized by the consumer and the revenue recognized is on net basis which is computed based on a fixed sharing ratio of the total airtime utilized by consumers after netting of direct traffic termination cost and incidental expenses. Redtone China?s role for Business Collaboration with China TieTong Telecommunications (CTT) would be as ?Agent? as Redtone China is the sole distributor for EMS brand owned and controlled by CTT; and o Collaboration with other telecommunication providers ? Redtone China will act as a discounted consumer call Reseller whereby Redtone China will determine the service and package specification and pricing policies whereas China Unicom acts as a passive termination partner for call traffic. Redtone China will pay China Unicom solely based on call traffic termination by China Unicom at a prescribed rate (defined as traffic termination costs on the books of Redtone China). In this regard, Redtone China will recognize the revenue when airtime is utilized by the consumer and the value recognized as revenue is the call charges gross value. Redtone China?s role for Business Collaboration with China Unicom would be as ?Principal? as China Unicom is playing a passive role as traffic termination partner while Redtone China is fully responsible for the e