Company: FORA
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001140361-25-042313
Chunk: 2

Company: Forian Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 8
Chunk 2
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 or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

   Level 1 - quoted prices in active markets for identical assets or liabilities;

   Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable; and

   Level 3 - inputs that are unobservable.

   The carrying value of the Company’s financial instruments, such as cash, marketable securities, accounts receivable and accrued liabilities and other liabilities approximate fair values due to the short-term nature of these instruments.

   Cash and Cash Equivalents and Credit Risk 

   The Company considers all cash accounts and highly liquid investments with a maturity of less than ninety days, when purchased, as cash and cash equivalents.

   The Company maintains cash with major financial institutions. Cash held at U.S. bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution, as the coverage is based on individually titled accounts. The portion of deposits in excess of FDIC coverage is not protected by such insurance and represents a credit risk to the Company. At times, the Company’s deposits exceed this coverage. 

   Accounts Receivable, Contract Assets and Allowance for Credit Losses 

   The Company records accounts receivable when it has the unconditional right to issue an invoice and receive payment regardless of whether revenue has been recognized. If revenue is recognized in advance of the right to invoice, a contract asset (unbilled receivable) is recorded in the condensed consolidated balance sheets.

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   Accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The Company determines the allowance for credit losses based on historical write-off experience, customer specific facts and economic conditions.

   Contract assets represent contractual rights to consideration in the future and are generated when contractual billing schedules differ from the timing of revenue recognition. The Company determines the allowance for credit losses based on historical payment experience, customer specific facts, expected performance over the duration of the contract and economic conditions.

   Outstanding account balances are reviewed individually for collectability or realizability. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable or contract