Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 253

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 8
Chunk 253
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 and accrued expenses

A provision is recognized in the
Condensed Consolidated Balance Sheets when the Company has a present legal or constructive obligation as a result of a past event, and
it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions
are recognized at present value by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments
of the time value of money.

Provisions for onerous contracts
are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting
the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating
the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any
impairment loss on the assets associated with that contract. The Company does not have any onerous contracts.

19

(n)Fair value measurements and financial instruments

Fair value is defined as the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. In accordance with ASC 820, Fair Value Measurement (“ASC 820”), the Company uses the fair value hierarchy,
which prioritizes the inputs used to measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the
fair value hierarchy are set forth below:

    Level
    1
    Observable
    inputs such as quoted prices in active markets for identical assets or liabilities.

    Level
    2
    Observable
    inputs other than Level 1 prices such as quoted prices for similar assets or liabilities in active markets, quoted prices in markets
    that are not active or inputs other than the quoted prices that are observable either directly or indirectly for the full term of
    assets or liabilities.

    Level
    3
    Unobservable
    inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities.

During the nine months ended December
31, 2024, the Company’s primary financial instruments included cash and cash equivalents, investments, accounts receivables, other
financial assets, accounts payable, debt, unsecured convertible note, redeemable promissory note and other financial liabilities. The