Company: NTWK
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010127
Chunk: 19

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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-K for the fiscal year ending June 30, 2026, on a prospective basis, with early adoption
permitted. We are evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

All
other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

NOTE
3 – REVENUE RECOGNITION

The
Company determines revenue recognition through the following steps:

●Identification
                                            of the contract, or contracts, with a customer;

●Identification
                                            of the performance obligations in the contract;

●Determination
                                            of the transaction price;

●Allocation
                                            of the transaction price to the performance obligations in the contract; and

●Recognition
                                            of revenue when, or as, the Company satisfies a performance obligation.

The
Company records the amount of revenue and related costs by considering whether the entity is a principal (gross presentation) or an agent
(net presentation) by evaluating the nature of its promise to the customer. Revenue is presented net of sales, value-added and other
taxes collected from customers and remitted to government authorities.

The
Company has two primary revenue streams: core revenue and non-core revenue.

Core
Revenue

The
Company generates its core revenue from the following sources: (1) software licenses, (2) services, which include implementation and
consulting services, and (3) subscription and support, which includes post contract support, of its enterprise software solutions for
the lease and finance industry. The Company offers its software using the same underlying technology via two models: a traditional on-premises
licensing model and a subscription model. The on-premises model involves the sale or license of software on a perpetual basis to customers
who take possession of the software and install and maintain the software on their own hardware. Under the subscription delivery model,
the Company provides access to its software on a hosted basis as a service and customers generally do not have the contractual right
to take possession of the software.

Non-Core
Revenue

The
Company generates its non-core revenue by providing business process outsourcing (“BPO”), other IT services and internet
services.

Performance
Obligations

A
performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under
Topic 606. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance
obligation is satisfied by transferring the promised good or service