Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 1573

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 4
Chunk 1573
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 fair value.

During the year ended December
31, 2023, the Company recorded an impairment loss of $11.8 million in the Consolidated Statement of Operations and Comprehensive Income/(Loss)
related to the Polish assets held for sale to reduce the carrying amount of the assets in the disposal group to their fair value less
costs to sell. This was recognized in discontinued operations on the Consolidated Statement of Operations and Comprehensive Income/(Loss).

During the year ended December
31, 2024, the Company recorded an impairment loss of $3.3 million in the Consolidated Statement of Operations and Comprehensive Income/(Loss)
related to the Spanish assets held for sale to reduce the carrying amount of the assets in the disposal group to their fair value less
costs to sell. This was recognized in Other Income/(Expense) for continuing operations on the Consolidated Statement of Operations and
Comprehensive Income/(Loss).

Deferred Financing Costs and Debt Discount
Amortization

The Company incurs expenses
related to debt arrangements. These deferred financing costs and debt discount costs are capitalized and amortized over the term of the
related debt or revolving credit facilities and netted against the related debt.

Asset Retirement Obligations

In connection with the acquisition
or development of solar energy facilities, the Company may have the legal requirement to remove long-lived assets constructed on leased
property and to restore the leased property to its condition prior to the construction of the long-lived assets. This legal requirement
is referred to as an asset retirement obligation (ARO). If the Company determines that an ARO is required for a specific solar energy
facility, the Company records the present value of the estimated future liability when the solar energy facility is placed in service
as an ARO liability. The discount rate used to estimate the present value of the expected future cash flows for the year ended December
31, 2023 was 7.3%. The Company accretes the ARO liability to its future value over the solar energy facility’s useful life and records
the related interest expense to amortization expense on the consolidated statement of operations. Solar facilities that require AROs are
recorded as part of the carrying value of property and depreciated over the solar energy facility’s useful life.

Leases

The Company accounts for leases
in accordance with ASC 842, Leases. The standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU
asset and lease liability on the balance sheet for all leases with