Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 663

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 9
Chunk 663
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 and Accounting Standards Codification Topic 326, Credit Losses (Topic 326), the discussions below on credit risk and
our allowances for doubtful accounts address our total revenues from Topic 606 and Topic 326.

Pursuant
to Topic 326 for our accounts receivables, we maintain an allowance for doubtful accounts that reflects our estimate of our expected
credit losses. Our allowance is estimated using a loss-rate model based on delinquency. The estimated loss rate is based on our historical
experience with specific customers, our understanding of our current economic circumstances, reasonable and supportable forecasts, and
our own judgment as to the likelihood of ultimate payment based upon available data. We perform credit evaluations of customers and establish
credit limits based on reviews of our customers’ current credit information and payment histories. We believe our credit risk is
somewhat mitigated by our geographically diverse customer base and our credit evaluation procedures. The actual rate of future credit
losses, however, may not be similar to past experience. Our estimate of doubtful accounts could change based on changing circumstances,
including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase
or decrease our allowance for doubtful accounts.

Inventory

Substantially
all inventory consists of raw materials and finished goods and are valued at the lower of historic cost or net realizable value; where
net realizable value is considered to be the estimated selling price in the ordinary course of business, less reasonably predictable
cost of completion, disposal and transportation. Historic inventory costs are calculated on a first-in, first-out basis or specific cost.

Property
and Equipment

Property
and equipment are recorded at cost and depreciated on a straight-line basis over the estimated useful lives. Ordinary repair and maintenance
costs are included in sales, general and administrative (“SG&A”) expenses on our consolidated statements of operations.
However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period
incurred. At the time assets are sold or disposed of, the cost and accumulated depreciation are removed from their respective accounts
and the related gains or losses are reflected in the statements of operations in gains from sales of property and equipment, net.

    F-9

We
periodically evaluate the appropriateness of remaining depreciable lives assigned to property and equipment. Leasehold improvements are
amortized using the straight-line method over their estimated useful lives or the remaining term of the lease, whichever is shorter.
Generally,