Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 23

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 23
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 each transaction that generates loyalty points results in the deferral of revenue equivalent to the retail value at the date the
points are earned. The associated revenue is recognized when the customer redeems the loyalty points at some time in future. The retail
value of points is estimated based on the current retail value measured as of the date the loyalty points are earned, less an estimated
amount representing loyalty points that are not expected to be redeemed (“breakage”). Breakage is reviewed on an annual basis
and includes significant assumptions such as historical breakage trends, internal Company forecasts and extended redemption period, if
any. As at December 31, 2024 and March 31, 2024, the Company’s deferred revenue balance amounted to $29,369 and $96,710 respectively
and is included in Contract liabilities in the Condensed Consolidated Balance Sheets.

13

ZOOMCAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contract liabilities

Contract liabilities primarily consist
of obligations to customers for advance received against bookings, revenue-share payable to customers for vehicles listed by them on
Company’s portal for short-term rentals and related to Company’s points-based loyalty program. As per ASC 606-10-50-14 the
Company does not aggregate amount of transaction price allocated to remaining performance obligations as required under ASC 606-10-50-13,
since the company’s performance obligation is a part of a contract that has an original expected duration of one year or less.

(e)Restricted Cash

The Company is required to place cash in an indemnification
escrow fund with the placement agent for all indemnification liabilities and expenses payable by the Company as per the placement agent
agreement for a period of 3 years from closing of the November 2024 Offering. Such cash is classified as restricted cash and reported
as a component of other non-current assets in the Condensed Consolidated Balance Sheets.

(f)Accounts receivable, net of allowance

Accounts receivables are stated net
of allowances and primarily represent corporate debtors and dues from payment gateways for amounts paid by customers. In case of corporate
debtors, the payment terms generally include a credit of 30-60 days. The amounts receivable from payment gateways are settled within
2 days.

The Company records an allowance
for credit losses for amounts owed for completed transactions that may never settle or be collected. The Company estimates its exposure
to balances deemed to be uncollectible based on