Company: LRHC
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001213900-25-078012
Chunk: 16

Company: La Rosa Holdings Corp.
Filing Date: 2025-08-18
Form: 10-Q
Item: Item 1
Chunk 16
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 January 2025, the FASB issued ASU 2025-01,
Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)- Clarifying the Effective
Date. The amendment in this Update amends the effective date of Update 2024-03 to clarify that all public business entities are required
to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods
beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of this new standard will have on
its consolidated financial statements.

Note 2 — Business Combinations

The
Company completed a number of acquisitions in the first half of 2024 and plans to acquire additional businesses  in
the future. The results of businesses acquired in a business combination are included in the Company’s condensed consolidated financial
statements from the date of acquisition. The Company allocates the purchase price, which is the sum of the consideration provided and
may consist of cash, equity, or a combination of the two, to the identifiable assets and liabilities of the acquired business at their
acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities,
if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant
judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates,
and selection of comparable companies. 

7

La Rosa Holdings Corp. and Subsidiaries

Notes to the Unaudited Condensed Consolidated
Financial Statements

To date, the assets acquired and liabilities
assumed in the Company’s business combinations have primarily consisted of goodwill and finite-lived intangible assets, consisting
primarily of franchise agreements, agent relationships, real estate listings, non-compete agreements, and right-of-use assets. The estimated
fair values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future
operating performance and cash flows of the acquired business, the nature of the business acquired, and the specific characteristics
of the identified intangible assets. The estimates and assumptions used to determine the fair values and useful lives of identified intangible
assets could change due to numerous factors, including market conditions, technological developments, economic conditions and competition.
In connection with the determination of fair values, the Company engages independent appraisal firms to