Company: RSKD
Filing Date: 2025-03-06
Form Type: 20-F
Source: 0001851112-25-000006
Chunk: 206

Company: RISKIFIED LTD.
Filing Date: 2025-03-06
Form: 20-F
Item: Item 19
Chunk 206
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 periods presented.

Indemnification Guarantees

We provide contractual guarantees around the accuracy of our approvals so that our merchants can confidently automate a transaction’s execution. Our Chargeback Guarantee contracts obligate us to indemnify our merchants for any costs incurred from a chargeback due to fraud (i. e., the “guarantee obligation”). Accordingly, we account for the guarantee obligation as an indemnification under the general provisions of ASC 460, Guarantees, or ASC 460, and recognize a liability at fair value upon approving a transaction at an amount that represents what we would need to pay a third party to relieve ourselves from this obligation. This liability is presented as Guarantee obligations on the consolidated balance sheets and will be released to revenue in the consolidated statements of operations.

We are relieved from our guarantee obligation at the earlier of (a) paying a chargeback or (b) expiration of the guarantee which is generally six months six-month

While no individual transaction is probable of a chargeback occurring, when we analyze a portfolio of transactions, if we believe a future chargeback is probable and reasonably estimated, we accrue a liability and an associated expense through cost of revenue in accordance with ASC 450, Contingencies, or ASC 450. Inputs and assumptions used by management to calculate this provision are based on the transactions approved and the features of those transactions as well as historical information about chargebacks. It is possible that the estimate may change in the near term, and the effect of the change could be material. These liabilities are recorded within Provision for chargebacks, net on the consolidated balance sheets and will be reduced by credits issued or cash paid to merchants. Refer to Note 9 below.

F-13

RISKIFIED LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Ordinary Share Warrants

In conjunction with a SaaS Agreement entered into in June 2021, we issued a warrant to a customer to purchase ordinary shares. The warrant vests annually, in equal amounts, over a five-year three years two years 299,700 199,800 two

The warrant was accounted for as consideration payable to a customer under ASC 606 and reduced revenue as we recognized revenue under the SaaS Agreement. Upon termination of the SaaS Agreement, we reduced revenue by the remaining unrecognized grant date fair value amount of $ 2.5

Revenue Recognition

We primarily generate revenue from our Chargeback Guarantee service which provides merchants access to our AI-powered eCommerce risk intelligence platform that is standing ready to review and guarantee eCommerce