Company: PHIL
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001493152-25-007556
Chunk: 103

Company: PHI GROUP INC
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 2
Chunk 103
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Global Energy, Inc. for commercialization.

CRITICAL
ACCOUNTING POLICIES

The
Company’s financial statements and related public financial information are based on the application of accounting principles generally
accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations
of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also
affect supplemental information contained in the external disclosures of the Company including information regarding contingencies, risk
and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and
conservatively applied. Valuations based on estimates are reviewed by us for reasonableness and conservatism on a consistent basis throughout
the Company. Primary areas where financial information of the Company is subject to the use of estimates, assumptions and the application
of judgment include acquisitions, valuation of long-lived and intangible assets, recoverability of deferred tax and the valuation of
shares issued for services. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable
under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.

6

Valuation
of Long-Lived and Intangible Assets

The
recoverability of long-lived assets requires considerable judgment and is evaluated on an annual basis or more frequently if events or
circumstances indicate that the assets may be impaired. As it relates to definite life intangible assets, we apply the impairment rules
as required by SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and Assets to Be Disposed Of” as amended
by SFAS No. 144, which also requires significant judgment and assumptions related to the expected future cash flows attributable to the
intangible asset. The impact of modifying any of these assumptions can have a significant impact on the estimate of fair value and, thus,
the recoverability of the asset.

Income
Taxes

We
recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases
of assets and liabilities. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based upon
historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences. As of
December 31, 2024, we estimated the allowance on net deferred tax assets to be one hundred percent of the net deferred tax assets