Company: AGCC
Filing Date: 2025-07-10
Form Type: F-1
Source: 0001213900-25-062654
Chunk: 207

Company: Agencia Comercial Spirits Ltd.
Filing Date: 2025-07-10
Form: F-1
Chunk 207
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 YEARS ENDED DECEMBER 31, 2023 AND 2024 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) ROU assets represent the Company’s rights to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term, reduced by lease incentives received, plus any initial direct costs, if any, using the discount rate for the lease at the commencement date. If the implicit rate in lease is not readily determinable for the Company’s operating leases, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight -linebasis over the lease term. Lease payments may be fixed or variable; however, only fixed payments or in -substancefixed payments are included in the lease liability calculation. Variable lease payments, if any, are recognized in operating expenses in the period in which the obligation for those payments is incurred. For operating leases, lease expense is recognized on a straight -linebasis over the lease term. For finance leases, lease expense is recognized as amortization on a straight -linebasis over the lease term and interest using the effective interest method. Any lease with a term of 12 months or less is considered short -term. As permitted by ASC 842, short -termleases are excluded from the ROU assets and lease liabilities on the balance sheets. Consistent with all other operating leases, short -termlease expense is recorded on a straight -linebasis over the lease term. Income taxes The Company follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes. The Company accounts for income taxes in accordance with the laws and regulations of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items which are non -assessableor disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from the differences between the carrying amount of assets and liabilities in the combined financial statements and the corresponding tax bases used