Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 2620

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 8
Chunk 2620
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) other working
capital items based in each case on their estimated fair values. The excess of the purchase price, if any, over the estimated fair value
of net assets acquired is recorded as goodwill. The fair value measurements of the assets acquired, and liabilities assumed were derived
utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs include, but are not
limited to, estimates of future power generation, commodity prices, operating costs, and appropriate discount rates. These inputs required
significant judgments and estimates at the time of the valuation. In addition, acquisition costs related to business combinations are
expensed as incurred.

When an acquired group of
assets does not constitute a business, the transaction is accounted for as an asset acquisition. The cost of assets acquired and liabilities
assumed in asset acquisitions is allocated based upon relative fair value. The fair value measurements of the solar facilities acquired
and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable
in the market. These inputs include, but are not limited to, estimates of future power generation, commodity prices, operating costs,
and appropriate discount rates. These inputs require significant judgments and estimates at the time of the valuation. Transaction costs,
including legal and financing fees directly related to the acquisition incurred, are capitalized as a component of the assets acquired.

The allocation of the purchase
price directly affects the following items in the Company’s consolidated financial statements:

    ●
    The amount of purchase price allocated to the various tangible and intangible assets and liabilities on the Company Balance Sheet; and

    ●
    The amounts allocated to all other tangible and intangible assets are amortized to depreciation or amortization expense, with the exception of favorable and unfavorable rate land leases and unfavorable rate Operation and Maintenance (O&M) contracts which are amortized to cost of revenue.

The period over which tangible
and intangible assets and liabilities are depreciated or amortized varies. Changes in the amounts allocated to these assets and liabilities
will have a direct impact on the Company’s results of operations.

Impairment of Long-Lived Assets and Identifiable
Intangible Assets

Identifiable intangible assets
with finite lives are amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The Company evaluates recoverability by comparing the carrying amount
of the asset group to the estimated undiscounted future cash flows