Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 822

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 3
Chunk 822
---
 country and by the general state of the country’s
economy. The Company’s operations in each foreign country are subject to specific considerations and significant risks not typically
associated with companies in economically developed nations. These include risks associated with, among others, the political, economic
and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental
policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods
of taxation, among other things.

Accounts
Receivable and Allowance for Doubtful Accounts

Accounts
receivable are recorded at the invoiced amount and are non-interest bearing. The Company recognizes an allowance for credit losses in
accordance with ASC 326, Financial Instrument -Credit Losses, based on expected losses over the contractual life of the receivables.
In measuring expected credit losses, management considers historical loss experience, customer credit quality, current economic conditions,
and reasonable and supportable forecasts. The allowance is evaluated collectively for groups of receivables with similar risk characteristics,
with specific reserves established for receivables that do not share those characteristics or when collectability is uncertain. Receivables
are written off against the allowance when collection efforts have been exhausted and recovery is not expected. Recoveries of amounts
previously written off are recognized when received.

    F-11

NETSOL
TECHNOLOGIES, INC.

Notes
to Consolidated Financial Statements

June
30, 2025 and 2024

Revenues
in Excess of Billings

Revenues
in excess of billings represent the total of the project to be billed to the customer for revenues recognized per US GAAP. As the customers
are billed under the terms of their contract, the corresponding amount is transferred from this account to “Accounts Receivable.”
The Company recognizes the potential risk associated with recognizing revenues in excess of billings, including the risk of non-payment
by the customer. Therefore, management continually assesses the collectability of such amounts and makes appropriate provisions or adjustments
if collectability becomes doubtful.

Property
and Equipment

Property
and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals
and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated
depreciation are removed from the respective accounts, and any gain or loss is included in operations. Deprec