Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 1580

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 4
Chunk 1580
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 the reporting unit to its carrying amount, including goodwill. If the carrying amount
exceeds the fair value, an impairment loss is recognized in an amount equal to the excess, limited to the carrying amount of goodwill.
The Company determines fair value using a combination of income and market approaches, as appropriate.

Income Taxes

Deferred taxes are determined
using the asset and liability method. Deferred tax assets are recognized for deductible temporary differences, operating loss, and tax
credit carry forwards. Deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax basis. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes
in tax laws and rates on the date of enactment.

F-18

The Company evaluated the
provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 prescribes
a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects
to take in its return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination
by taxing authorities. Differences between the positions taken or expected to be taken in a tax return and the benefit recognized and
measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized for an unrecognized
tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was
not recognized as a result of applying the provisions of ASC 740.

As a result of the Tax Cuts
and Jobs Act (TCJA) of 2017, the Company analyzed if a liability needed to be recorded for the deemed repatriation of undistributed earnings.
It was determined that there is no outstanding liability associated with this based on overall negative undistributed earnings (accumulated
deficit) in the consolidated foreign group. An additional provision of the TCJA is the implementation of the Global Intangible-Low Taxed
Income Tax, or “GILTI.” The Company has elected to account for the impact of GILTI in the period in which the tax applies
to the Company.

Penalties and interest assessed by income tax authorities would be
included in income tax expense. The company incurred penalties of $0.2 million and $0.4 million for the period ended December