Company: CENN
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001140361-25-041657
Chunk: 79

Company: Cenntro Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part II, Item 8
Chunk 79
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 investment in equity security on the unaudited condensed consolidated balance sheet; ii) wealth management products purchased from banks, which represents the available-for-sale
        investments in short-term investments on the unaudited condensed consolidated balance sheet.

        (d)  Revenue recognition   

      The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In
        determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of a contract with the customer; (ii) determination of performance obligations; (iii)
        measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

      The Company generates revenue primarily through sales of light-duty ECVs, sales of ECV parts, and sales of off-road electric vehicles.

      The promised warranty does not provide the clients with a service in addition to the assurance that the product complies with agreed-upon contract specifications and is considered an assurance
        warranty. The warranty is not considered separate performance obligations and no revenue is associated with these services under ASC 606. Historically, the Company has not experienced material costs for quality assurance and, therefore, does not
        believe an accrual for these costs is necessary.

      Revenue is recognized upon the satisfaction of its performance obligation (upon transfer of control of promised goods or services to customers) in an amount that reflects the consideration to which
        the Company expects to be entitled to in exchange for those goods or services, excluding amounts collected on behalf of third parties (for example, value added taxes).

      The Company acts as a principal in the revenue generating process and should recognize revenue on a gross basis. Revenues are measured as the amount of consideration the Company expects to receive in
        exchange for transferring products to customers. Consideration is recorded net of sales returns and VAT. Sales returns is estimated based on historical experiences, which were insignificant for the nine months ended September 30, 2025 and 2024. The
        consideration is fixed, with no variable consideration. All transactions are settled in cash within the normal credit period, and there is no financing component.

      Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfilment costs rather than separate performance obligations and
        recorded as sales