Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 240

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 19
Chunk 240
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2, and such
adoption did not impact on the consolidated financial statements.

In June 2016, the Financial Accounting Standards
Board (“ FASB”) issued Accounting Standards Update (“ ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326),
Measurement of Credit Losses on Financial Instruments, and issued subsequent amendments to the initial guidance within ASU 2018-19, ASU
2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02, collectively referred to as “ ASC 326”. ASC 326 requires a financial asset
(or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance
for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying
value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is based on relevant information
about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability
of the reported amount. ASC 326 eliminates the probable initial recognition threshold in current GAAP and, instead, reflects an entity’s
current estimate of all expected credit losses. The adoption of this standard resulted in a change of the Company’s provision policy
primarily for accounts receivable. The Company adopted this ASC 326 on January 1, 2023 with no material impact on the consolidated financial
statements.

In October 2021, the FASB issued ASU 2021-08,
Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under ASU 2021-08,
an acquirer must recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with
Topic 606 as if it had originated the contracts. Prior to this ASU, an acquirer generally recognized contract assets acquired and contract
liabilities assumed that arose from contracts with customers at fair value on the acquisition date. The Company adopted this ASU on January
1, 2023 and the adoption did not have a material impact on the Company’s consolidated financial statements.

F-48

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

Accounting Standards to be Adopted

In June 2022, the FASB issued ASU 2022-03 Fair