Company: LASE
Filing Date: 2025-06-24
Form Type: 10-K
Source: 0001641172-25-016194
Chunk: 942

Company: Laser Photonics Corp
Filing Date: 2025-06-24
Form: 10-K
Item: Item 5
Chunk 942
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received as deposits for specific purchase orders or future laser equipment sales to customers are recognized as customer deposits and
included in liabilities on the balance sheet. Customer deposits are recognized as revenue when control over the ordered equipment is
transferred to the customer.

Contract
Assets and Contract Liabilities

Account
receivable are recognized in the period when the Company’s right to consideration is unconditional. Accounts receivable are recognized
net of an allowance for credit losses. A considerable amount of judgement is required in assessing the likelihood of realization of receivables.

The
timing of revenue may differ from timing of invoicing customers.

Contract
assets include unbilled amounts from long-term construction services when revenue recognized under the cost-to-cost measure of progress
exceeds the amounts invoiced to customers, as the amounts cannot be billed under the terms of the contracts. Such amounts are recoverable
from customers based upon various measures of performance, including achievement of certain milestones, completion of specified units
or completion of contract. Contracts assets are generally classified as current within the consolidated balance sheet.

Contract
liabilities from construction contracts occur when amounts invoiced to customers exceed revenues recognized under the cost-to-cost measures
of progress. Contract liabilities additionally include advance payments from customers on certain contracts. Contract liabilities decrease
as the Company recognizes revenue from the satisfaction of the related performance obligation. Contract liabilities are generally classified
as current within the consolidated balance sheet.

Although
the Company believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably
possible that additional significant costs could occur on contracts prior to completion. The Company periodically evaluates and revises
its estimates and makes adjustments when they are considered necessary.

The
Company recognizes revenue by applying the following 5 step model:

1.
Identifying the Contract(s) with a Customer. The Company enters into written contract with customers that create enforceable rights and
obligations. Contracts are assessed to ensure they meet criteria for being considered legally binding and capable of being accounted
for.

2.
Identify the Performance Obligations in the Contract. Performance obligations are identified as distinct promises to transfer goods or
services to a customer. The Company identifies their scope of work and creates a schedule of values (SOV) outlining each individual scope
of the project.

3.
Determine the Transaction Price. The transaction price is the amount of considerations the Company expects to be entitled to in exchange
for transferring promised services. The transaction price may include fixed amounts or cost-plus percentage method.

4.
Allocate the Transaction