Company: KPEA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023821
Chunk: 29

Company: Kun Peng International Ltd.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 29
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encies

The
Company follows the ASC 450-20, “Contingencies” to report accounting for contingencies. Certain conditions may exist as of
the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more
future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise
of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims
that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well
as the perceived merits of the amount of relief sought or expected to be sought therein.

    19

If
the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability
can be estimated, then the estimated liability would be accrued in the Company’s condensed consolidated financial statements. If
the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but
cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and
material, would be disclosed.

Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Management does not believe, based upon information available at this time that these matters will have a material adverse effect on
the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not
materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Recent
Accounting Pronouncements

In
March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation. This ASU clarifies how to determine whether profits
interest and similar awards should be accounted for as share-based payment arrangements. The ASU is effective in reporting periods beginning
after December 15, 2024, including interim periods within the fiscal year, on a prospective or retrospective basis. Early adoption is
permitted. The Company is currently evaluating the impact that adoption of this accounting standard will have on its condensed consolidated
financial statements and disclosures.

In
November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. This ASU requires annual and interim