Company: FSTWF
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-044386
Chunk: 168

Company: FST Corp.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 16
Chunk 168
---
 Accounts
receivable

Accounts receivable is stated at the original
amount less an allowance for credit losses.

Accounts receivable is recognized in the period
when the Group has provided services to its customers and when its right to consideration is unconditional. The allowance for doubtful
accounts is estimated based on the expected loss approach prescribed by ASC 326. The Group’s estimation of allowance for credit
losses considers factors such as historical credit loss experience, age of receivable balances, current market conditions, reasonable
and supportable forecasts of future economic conditions, as well as an assessment of receivables due from specific identifiable counterparties
to determine whether these receivables are considered at risk or uncollectible.

The Group evaluates its accounts receivable for
expected credit losses on a regular basis. The Group maintains an estimated allowance for credit losses to reduce its accounts receivable
to the amount that it believes will be collected. The Group considers factors in assessing the collectability of its receivables, such
as the age of the amounts due, the customer’s payment history, credit-worthiness and other specific circumstances related to the
accounts. The Group adjusts the allowance percentage periodically when there are significant differences between estimated bad debts and
actual bad debts. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, the Group also makes
specific allowance in the period in which a loss is determined to be probable. Accounts receivable balances are written off after all
collection efforts have been exhausted.

The Group recognized allowance for credit losses
of $34,730and $1,652, respectively, for the years ended December 31,2024 and 2023.

F-9

FST Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In U. S. dollars, except for share and per
share data, or otherwise noted)

2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

(f) Prepayment and other assets

Prepayment and other assets represent amounts
that the Group has paid in advance of receiving benefits or services. Prepayment and other assets include amounts for prepayments to suppliers,
prepaid expenses and prepayment for equipment and are recognized as an expense over the general contractual period.

(g) Related parties

Parties are considered to be related if one party
has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial
and operating decisions. Parties are also considered to be related