Company: RIVF
Filing Date: 2025-09-10
Form Type: 10-Q
Source: 0001493152-25-013005
Chunk: 11

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-09-10
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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0 and $10.5
million of production cost amortization, respectively, which is presented as production cost amortization in the Company’s condensed consolidated
statements of operations. During the three and nine months ended March 31, 2024, the Company had no
film cost amortization.

Impairment
of Capitalized Production Costs

The
Company will test its unamortized production costs whenever events or changes in circumstances indicate that the fair value of a film
may be less than its unamortized costs. If the Company determines that the fair value of a film is less than its unamortized production
costs, then the unamortized capitalized costs for the film will be written down by the amount exceeding the film’s fair value.
The unit of account for impairment testing is the individual film being produced and the fair value is determined using a discounted
cash flow technique.

Recognition
of Revenue from Contracts with Customers

The
Company recognizes revenue from its contracts with customers in accordance with the core principle outlined in ASC 606, Revenue from
Contracts with Customers. Specifically, “to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which we expect to be entitled in exchange for those goods or services”. To that extent, the Company
recognizes revenue in accordance with the ASC Topic by applying the following five steps:

    ●
    Step
    1-Identify the contract(s) with a customer

    ●
    Step
    2-Identify the performance obligations in the contract

    ●
    Step
    3-Determing the transaction price

    ●
    Step
    4-Allocate the transaction price to the performance obligations in the contract

    ●
    Step
    5-Recognize revenue when (or as) the Company satisfies a performance obligation

The
Company’s contracts with its customers currently contain a single performance obligation comprised of a license to motion picture
rights. In accordance with ASC 606, the Company ( i.e. the “licensor”) has concluded that the license transfer should i)
be considered functional intellectual property and ii) that customers (the “licensees” or “distributors”)  are therefore granted a right to use the Company’s intellectual property as it exists at the point in time at which the
license is granted. As such, revenue is recognized at a point in time upon the Company’s delivery of the license to the licensee.
The Company