Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 140

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 4A
Chunk 140
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 of matters that are inherently uncertain. Based on this definition, we have identified certain
accounting policies as critical accounting policies as they require management’s highest degree of judgment, estimates and assumptions.
Our critical accounting policies and practices include the following: (i) revenue recognition, (ii) account receivables, net and (iii)
income taxes. See Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure
of these accounting policies for the discussion of the recent accounting pronouncements. We believe the following accounting estimates
involve the most significant judgments used in the preparation of our consolidated financial statements.

Estimated provision for credit losses

The Group carries accounts
receivable at the original invoice amount less a provision for estimated credit losses. As of June 30, 2023, the Group recorded a provision
for credit losses related to accounts receivable of HKD19,022. The Group estimated its provision for credit losses using relevant available
information from internal and external sources relating to past events including aging schedule of receivables, migration rate of receivables,
assessment of receivables due from specific identifiable counterparties that are considered at risk or uncollectible, current conditions
and reasonable and supportable forward-looking factors. During the year ended June 30, 2025 and 2024, the Group (revered)/accrued HKD(77,218)
(US$(9,837)) and HKD101,598 provision for credit losses on the consolidated financial statement related to accounts receivable respectively.
As of June 30, 2025 and 2024, the provision for credit losses was HKD43,402 (US$5,529) and HKD120,620.

Valuation of deferred tax assets

The Group accounts for income
tax in accordance with U. S. GAAP. Under the asset and liability method as required by this accounting standard, the recognition of deferred
income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial
reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred tax.

The charge for taxation is
based on the results for the fiscal year as adjusted for items, which are non-assess-able or disallowed. It is calculated using tax rates
that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is charged or
credited in the consolidated statement of operations, except when it is related to items credited