Company: DTCK
Filing Date: 2025-12-23
Form Type: 6-K
Source: 0001683168-25-009327
Chunk: 15

Company: DAVIS COMMODITIES Ltd
Filing Date: 2025-12-23
Form: 6-K
Chunk 15
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 the lease once management has determined that the
lease payments are reasonably expected to be collected. The performance obligation under these leasing arrangements is to lease the investment
property to the lessee, and to ensure that the investment property is available for use over the life of the lease contract. Rental income
from investment property included in Other Income amounted to US$13,379 and US$14,413 for the six-month periods ended June 30, 2024 and
2025, respectively.

(o) Cost of revenue

Cost of revenue mainly consists of raw material
costs, labor costs, sub-contracting costs, production overhead, shipping, storage and handling and insurance costs.

(p) Selling and marketing expenses

Selling expenses mainly consists of promotion
and marketing expenses and transportation expenses. The Company does not carry any capitalized contract acquisition costs that would be
amortized to its results of operations over time, and potential expenses related to customer and contract acquisitions costs if any are
accounted for as periodic costs.

(q) General and administrative expenses

General and administrative expenses mainly consist
of staff cost, depreciation, office supplies and upkeep expenses, travelling and entertainment, legal and professional fees, property
and related expenses, other miscellaneous administrative expenses.

| F-13 |

(r) Operating leases

The Company adopted ASC 842 on January 1,
2019. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease
right-of-use (“ROU”) assets, operating lease liability, and operating lease liability, non-current, in the
Company’s unaudited interim condensed consolidated balance sheets. ROU assets represent the Company’s right to use an
underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising
from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease
payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it
is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the
Company used an incremental borrowing rate based on the information available at commencement date in determining the present value
of lease payments. The Company has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02:
(i) for leases that have lease terms of 12 months or less and does not include a purchase option that is reasonably