Company: RIVF
Filing Date: 2025-09-10
Form Type: 10-Q
Source: 0001493152-25-013005
Chunk: 10

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-09-10
Form: 10-Q
Item: Part I, Item 1
Chunk 10
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 U.S. GAAP requires the Company’s management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate,
could change in the near term due to one or more future confirming events. The Company bases its estimates on historical experience and
on various assumptions that are believed to be reasonable, the results of which form the basis for the amounts recorded in the condensed
consolidated financial statements.

     6

Cash
and Cash Equivalents

The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash or cash equivalents.

Film
Costs

In
accordance with ASC 926, Entertainment-Films, the Company reports production costs incurred as a separate asset on its condensed
consolidated balance sheets (“Film costs”). Production costs include all direct negative costs incurred in the physical production
of a film, such as compensation of cast and rental facilities on location, as well as allocations of production overhead and capitalized
interest (if any). Further, costs incurred related to significant changes to a film are added to production costs and subsequently charged
to expense when the Company recognizes the related revenue.

Amortization
of Film Costs

As
the Company’s films are monetized on their own, the Company amortizes film costs using the individual-film-forecast-computation
method. Pursuant to that method, unamortized film costs as of the beginning of the current fiscal year are multiplied by the individual-film-forecast-computation
method fraction. To that extent, the Company will begin amortization of capitalized film costs when a film is released, and it begins
to recognize revenue from that film. The Company will review and revise its estimate of ultimate revenue as of each reporting date to
reflect the most currently available information. Changes to the estimate of ultimate revenue, if any, are accounted for prospectively.
Amortization of film costs is presented as production cost amortization on the face of the Company’s condensed consolidated statements
of operations.

During
the three and nine months ended March 31, 2025, the Company recognized approximately $