Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 2285

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 14
Chunk 2285
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ensed as incurred.

Goodwill

Goodwill
represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination.
Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying
amount of goodwill may be impaired. In conducting its annual impairment test, the Company first
reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its
carrying amount. If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs
a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash
flows. If the carrying value of the reporting unit continues to exceed its fair value, the fair value of the reporting unit’s goodwill
is calculated and an impairment loss equal to the excess is recorded.

    F-12

NETSOL
TECHNOLOGIES, INC.

Notes
to Consolidated Financial Statements

June
30, 2025 and 2024

Fair
Value of Financial Instruments

The
Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value
and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for
fair value measures. For certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts
payable and short-term debt, the carrying amounts approximate fair value due to their relatively short maturities.

The
three levels of valuation hierarchy are defined as follows:

    Level
    1:
    Valuations
    consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority.

    Level
    2:
    Valuations
    rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability.

    Level
    3:
    Valuations
    are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement
    and are less observable and thus have the lowest priority.

The
Company’s financial assets that were measured at fair value on a recurring basis as of June 30, 2025, are as follows:

SCHEDULE
OF FAIR VALUE OF FINANCIAL ASSETS MEASURED ON RECURRING BASIS

    Level