Company: EZOO
Filing Date: 2025-05-15
Form Type: 10-K
Source: 0001641172-25-010460
Chunk: 643

Company: Ezagoo Ltd
Filing Date: 2025-05-15
Form: 10-K
Item: Item 1A
Chunk 643
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or as) the customer obtains control of that asset.

    b.
    Revenue
    is recognized when the advertising service is performed. According to the sample advertising and e-commerce contract, upon obtaining
    the signed contract and order from the Customer, the service and goods’ period would be started. Therefore, the revenue is
    recognized when the service and goods are completely provided and delivered at that point in time.

Under
Topic 606, revenues are recognized when the promised services and goods have been confirmed and transferred to the consumers in amounts
that reflect the consideration the customer expects to be entitled to in exchange for those services. The Company presents value added
taxes (“VAT”) as reductions of revenues. The Company recognizes revenues net of value added taxes (“VAT”) and
relevant charges.

● Cost of revenues

Cost
of revenue includes costs of goods sold and sales commissions expenses of e-commerce trading in ZCZX, production costs of short video
advertisement, the operating salaries for the staffs who running the ZCZX and LSM, and online cloud and database expenses for e-commerce
storage use on ZCZX and LSM.

● Value-added taxes

Revenue
is recognized net of value-added taxes (“VAT”). The VAT is based on gross sales price and VAT rates applicable to the Company
is 13% of e-commerce trading income and 6% of commission income for the years ended December 31,
2024 and 2023. All of the VAT returns
filed by the Company’s subsidiaries in the PRC, have been and remain subject to examination by the PRC tax authorities for five
years from the date of filing. VAT payables are included in accrued liabilities.

● Income taxes

The
Company followed the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes, or ASC 740. Under this
method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets
and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company
recorded a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not
that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized
in tax expense in the period that includes the enactment date of the change in tax rate.

The
Company accounted for uncertainties