Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 208

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 19
Chunk 208
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 classified as held for sale are met, including management, having the authority
to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent
liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations.
At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components
of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45.

As of September 30, 2023, the Group’s long-term
apartment rental businessin the PRC met all the conditions required in order to be classified as a discontinued operation. Accordingly,
the operating results of long-term apartment rental businessin the PRC are reported as a
loss from discontinued operations in the accompanying consolidated financial statements for all periods presented. In addition, the assets
and liabilities related to long-term apartment rental businessin the PRC are reported as
assets and liabilities of discontinued operations in the accompanying consolidated balance sheets. For additional information, see Note
3, “ Disposition of Long-term Apartment Rental Business”.

Concentration of credit risk

Financial instruments that potentially expose the Group to concentration
of credit risk consist primarily of cash and cash equivalents.

All of the Group’s cash and cash equivalents are held with financial
institutions that Group management believes to be high credit quality. To limit exposure to credit risk relating to deposits, the Company
primarily place cash and cash equivalent deposits with large financial institutions in the United States and the PRC which management
believes are of high credit quality and the Company also continually monitors their credit worthiness.

F-19

Segment reporting

The Group uses management approach to determine operation segment.
The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“ CODM”)
for making decisions, allocation of resource and assessing performance.

The Group’s CODM has been identified as the Chief Executive Officer
who reviews the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group.
The Group operates and manages its business as a single operating segment.

The Group’s long-lived assets are all located in the PRC and
all of the Group’s revenues are derived from within the PRC. Therefore, no geographical segments are presented.

Recent accounting pronouncements

In December 2023, the FASB issued ASU 2023-