Company: ASC
Filing Date: 2025-03-07
Form Type: 20-F
Source: 0001558370-25-002500
Chunk: 117

Company: Ardmore Shipping Corp
Filing Date: 2025-03-07
Form: 20-F
Item: Item 5
Chunk 117
---
 benefits of our performance as the voyage progresses and therefore revenues are recognized on a pro rata basis over the duration of the voyage determined on a load-to-discharge port basis.

Table of Contents

The consideration that we expect to be entitled to receive includes estimates of revenue associated with the loading or discharging time that exceed the originally estimated duration of the voyage, which is referred to as “demurrage revenue”, when it is determined there will be incremental time required to complete the contracted voyage.

Demurrage revenue, which is earned during a voyage charter and represents variable consideration, which is estimated at contract inception based on estimates for any potential delays exceeding the allowed laytime as per the charter party clause at the ports visited. It is not considered a separate deliverable in accordance with ASC 606 as it is part of the single performance obligation in a spot charter arrangement, which is to provide cargo transportation services to the completion of a contracted voyage.

Time charter arrangements

From time to time the Company enters into time charter arrangements, which are for a specified period of time, and key decisions concerning the use of the vessel during the duration of the time charter period reside with the charterer. In time charter arrangements, the Company is responsible for the crewing, maintenance and insurance of the vessel, and the charterer is generally responsible for voyage specific costs, which typically include bunkers and port/canal costs.

As the charterer holds sufficient latitude in its rights to determine how and when the vessel is used on voyages and the charterer is also responsible for costs incurred during the voyage, the charterer derives the economic benefits from the use of the vessel, as control over the right to use the vessel is transferred to the charterer during the specified time charter period. Accordingly, time charters are considered operating leases and the Company applies guidance for lessors in FASB Accounting Standards Codification 842 - Leases(“ ASC 842”). The Company has elected to apply the practical expedient under Accounting Standards Codification 842 - Leases(“ ASC 842”), which allows lessors to account for lease and non-lease components as a single lease component when certain criteria are met. Revenue for time charters is recognized on a straight-line basis ratably over the term of the charter.

Share-based compensation. We may grant share-based payment awards, such as restricted stock units (“ RSUs”) and stock appreciation rights (“ SARs”), as incentive-based compensation to certain employees and directors. We granted to certain employees, directors and officers SARs in