Company: LICN
Filing Date: 2025-04-29
Form Type: 20-F
Source: 0001213900-25-036244
Chunk: 115

Company: Lichen International Ltd
Filing Date: 2025-04-29
Form: 20-F
Item: Item 19
Chunk 115
---
 impact the future use of the assets, indicate that the carrying amount of an asset may not
be fully recoverable. When these events occur, the Company evaluates the recoverability of long-lived assets by comparing the carrying
amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition.
If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment
loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting
the cash flows expected to be generated by the assets, when the market prices are not readily available. The adjusted carrying amount
of the assets become new cost basis and are depreciated over the assets’ remaining useful lives. Long-lived assets are grouped with
other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other
assets and liabilities. Given no events or changes in circumstances indicating the carrying amount of long-lived assets may not be recovered
through the related future net cash flows, the Company did not recognize any impairment loss on long-lived assets for the years ended
December 31, 2024 and 2023. There can be no assurance that future events will not have impact on the Company’s revenue or financial
position which could result in impairment in the future.

Operating leases

The Company, through its subsidiary, leases its
office, which are classified as operating leases in accordance with ASC 842. Operating leases are required to record in the balance sheet
as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments. The Company has elected the
package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption
date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date, and (3) initial direct
costs for any expired or existing leases as of the adoption date. The Company elected the short-term lease exemption for the lease terms
that are 12 months or less.

At inception of a contract, the Company assesses
whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified
asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease