Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 214

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 214
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 qualitative assessment indicates that the investment is impaired and that
the fair value of the investment is less than its carrying value. If an equity investment without a readily determinable fair value is
impaired, the Company includes an impairment loss in net income equal to the difference between the fair value of the investment and its
carrying amount.

F-31

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

(n) Property, plant and equipment,
net

Property, plant and equipment are stated at cost
less accumulated depreciation and any recorded impairment.

Depreciation on property, plant and equipment
is calculated on the straight-line method over the estimated useful lives of the assets as follows:

  Operating equipment             3 - 5 years             
  Electronic equipment            3 years                 
  Office equipment and other      3 years                 
  Leasehold improvements          Shorter of 2 - 3 years  

Expenditures for repairs and maintenance are expensed
as incurred, whereas the costs of renewals and betterment that extends the useful lives of property, plant and equipment are capitalized
as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the costs, accumulated depreciation
and impairment with any resulting gain or loss recognized in “cost of revenues, sales and marketing expenses, general and administrative
expenses” in the consolidated statements of operations and comprehensive loss.

(o) Intangible Assets, net

Intangible assets represent franchise agreements,
customer relationships and brand name acquired through business combinations, which were initially recognized and measured at fair value
upon acquisitions and are amortized on a straight-line basis over respective estimated useful life of1.5-11years.

(p) Impairment of Long-lived Assets
other than Goodwill

The Company evaluates the recoverability of its
long-lived assets, including property, plant and equipment and the intangible assets and for impairment whenever events or changes in
circumstances indicate that the carrying amount of its asset may not be fully recoverable. When these events occur, the Company measures
impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash flows expected to result from the
use of the asset and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of
the asset, the Company recognizes an impairment loss based on the excess of the carrying amount of the asset over their fair value. Fair
value is generally determined by discounting the cash flows expected to