Company: HNIT
Filing Date: 2025-01-23
Form Type: 10-K
Source: 0001493152-25-003324
Chunk: 192

Company: Huineng Technology Corp
Filing Date: 2025-01-23
Form: 10-K
Item: Item 6
Chunk 192
---
 liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant
assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset.

This
ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and
the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level
1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level
2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the
full term of the asset or liability; and

Level
3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported
by little or no market activity).

Measurement
of Credit Losses on Financial Instruments

The
Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred loss methodology
with an expected credit loss methodology known as the Current Expected Credit Loss (CECL) model. This new standard requires entities
to estimate credit losses over the life of a financial asset based on historical experience, current conditions, and reasonable forecasts.

The
adoption of the CECL model applies to the Company’s portfolio of trade receivables and other financial assets, and resulted in
changes to the methodology for determining the allowance for credit losses. Under the CECL model, the Company recognizes an allowance
for credit losses at the inception of a financial asset and adjusts it over the life of the asset based on updated expectations of credit
losses.

Recently
issued and adopted accounting pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting
(Topic 280): Improvements to Reportable Segment Disclosures”, which expands annual and interim disclosure requirements for reportable
segments, primarily through enhanced disclosures about significant segment expenses. The ASU 2023-07 is effective for annual reporting
periods beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted.
The Company is currently evaluating