Company: NCL
Filing Date: 2025-07-01
Form Type: 10-K
Source: 0001575872-25-000433
Chunk: 71

Company: Northann Corp.
Filing Date: 2025-07-01
Form: 10-K
Item: Item 13
Chunk 71
---
 Company would make specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use judgment in assessing its collectability. Allowance for doubtful accounts was nil and nil as of December 31, 2024 and 2023. Inventories  Inventories consist of raw materials, work-in-process, and finished goods and are stated at lower of cost or net realizable value. Costs are computed under the weighted average method. Net realizable value is determined as estimated selling prices in the ordinary course of business, less reasonably predictable costs to sell. Valuation of inventories is based on currently available information about expected recoverable value. The estimate is dependent upon factors such as market trends, inventory ageing, and historical and forecasted customer demands. Inventory write-down would be recorded as cost of revenues. No inventory write-down was recognized in the year ended December 31, 2024 and 2023. Long-Lived Assets Long-lived assets consist primarily of equipment and intangible assets. Equipment Equipment is recorded at cost less accumulated depreciation and accumulated impairment. Depreciation is computed using the accelerated depreciation method over the estimated useful lives of the assets.   Estimated useful lives (years) Office and computer equipment  3-5 Manufacturing equipment  10-20  Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of equipment is the difference between the net sales proceeds and the lower of the carrying value or fair value less cost to sell the relevant assets. The gain or loss on the disposal and impairment of equipment are recognized in general and administrative expenses in the consolidated statements of comprehensive loss.   Construction in progress Construction in progress represents property, plant and equipment under construction and pending installation and is stated at cost less accumulated impairment losses, if any. Completed assets are transferred to their respective asset classes and depreciation begins when an asset is ready for its intended use. Land Use Rights, Net Land use rights are a form of intangible assets in the PRC. They are recorded at cost less accumulated amortization with no residual value. Amortization of land use rights are computed using the straight-line method over their estimated useful lives. The estimated useful lives of the Company’s land use rights are as listed below:   Estimated useful lives (years) Land use right  50