Company: ZCARW
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001213900-25-059675
Chunk: 1084

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 2
Chunk 1084
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 accounts receivables, other
financial assets, accounts payable, debt, unsecured convertible note, redeemable promissory note and other financial liabilities. The
estimated fair value of cash equivalents, accounts receivable, accounts payable, redeemable promissory note and accrued liabilities approximate
their carrying value due to short-term maturities of these instruments.

xxvii.Troubled debt restructuring

As per ASC 470-60 Troubled Debt Restructuring
(TDR) refers to a situation where the creditor, grants concessions to a borrower experiencing financial difficulties. These concessions
may include modifications to the terms of the payable, such as reducing the interest rate, extending the repayment period, or forgiving
a portion of the payable. Such restructuring is done with the intent to provide relief to the borrower and to maximize the potential for
payable recovery by the Company.

In accordance with ASC 470-60, when
the total future cash payments under the new terms are less than the carrying amount of the payable at the date of restructuring, the
difference between the carrying amount and the total future cash payments is recognized as a ‘Gain on Troubled Debt Restructuring’
in the Consolidated Financial Statements. This gain is recorded immediately in the period the restructuring occurs.

If the total future cash payments
under the new terms exceed the carrying amount of the payable at the date of restructuring, no adjustment to the carrying amount of the
payable is made. Instead, the company calculates a New Effective Interest Rate (EIR) based on the revised terms of the restructured payable.
The debt is then amortized over the remaining life of the payable using the new EIR, with interest expense recognized based on this rate
in future periods.

F-20

ZOOMCAR HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.Summary of Significant Accounting Policies (Continued)

xxviii.Taxes

Income taxes are accounted for under
the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss
and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation