Company: CNTB
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001835268-25-000014
Chunk: 258

Company: Connect Biopharma Holdings Ltd
Filing Date: 2025-03-31
Form: 10-K
Item: Item 8
Chunk 258
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 we consider our credit risk, the lease term, the total lease payments and the impact of collateral, as necessary. We use the implicit rate when readily determinable. The ROU lease assets equal the lease liabilities, less unamortized lease incentives, unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease. The lease term includes any option to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We have elected the practical expedient to not separate lease and non-lease components.

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Revenue Recognition - License and Collaboration AgreementsThe Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”). Under Topic 606, an entity recognizes revenue when its customer obtains control of goods and services, in an amount that reflects the consideration that the entity expects to be entitled to exchange for those goods and services. The Company performs the following five steps to recognize revenue under Topic 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize the revenue when (or as) the entity satisfies a performance obligation. The Company only recognizes revenue to which it is probable that it will collect the consideration to which it is entitled to exchange for the goods or services that will be transferred to the customer.When the Company enters into any arrangement involving the sale or license of intellectual property rights and other services, the Company determines whether the arrangement is subject to accounting guidance in Topic 606 and ASC 808, Collaboration Arrangements (“Topic 808”). If the Company determines that an arrangement includes goods or services that are central to the Company’s business operations for consideration, the Company will then identify the performance obligations in the contract using the unit of account guidance in Topic 606. For a distinct unit of account that is within the scope of Topic 606, the Company applies all of the accounting requirements in Topic 606 to that unit of account, including the recognition, measurement, presentation and disclosure requirements. For a distinct unit of account that is not within the scope of Topic 606, the Company will recognize and measure the distinct unit of account based on other authoritative ASC Topics or on a reasonable, rational, and consistently applied policy election.Analyzing the license arrangements to identify performance obligations requires the use of