Company: FLYE
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001213900-25-015334
Chunk: 27

Company: Fly-E Group, Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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 Leases

The Company accounts for leases in accordance
with ASC 842. The Company leases premises for offices, warehouses, and retail stores under non-cancellable operating leases, and
the Company leases its products to customers under non-cancellable operating leases.

Lessor

The
Company’s lease arrangements include products rentals to customers. The lease term is from one hour to one month. Due to the short-term
  nature of these arrangements, the Company classifies these
leases as operating leases. The Company does not separate lease and non-lease components, such as insurance or roadside assistance provided
to the lessee, in its lessor lease arrangements. Lease payments are primarily fixed and are recognized as revenue in the period over which
the lease arrangement occurs. Taxes or other fees assessed by governmental authorities that are both imposed on and concurrent with each
lease revenue-producing transaction and collected by the Company from the lessee are excluded from the consideration in its lease arrangements.
The Company mitigates residual value risk of its leased assets by performing regular maintenance and repairs, as necessary, and through
periodic reviews of asset depreciation rates based on the Company’s ongoing assessment of present and estimated future market conditions.

Lessee

The Company recognizes right-of-use assets and
lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted
for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms. Leases
with an initial term of 12 months or less are short-term leases and not recognized as operating lease right-of-use assets and operating
lease liabilities on the unaudited condensed consolidated balance sheets. The Company recognizes lease expense for short-term leases on
a straight-line basis over the lease term.

Right-of-use assets are initially measured at
cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives
received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any
remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the unaudited condensed consolidated balance
sheets.

15

Right-of-use assets are depreciated using the
straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of
the lease terms