Company: CNEY
Filing Date: 2025-10-29
Form Type: F-1/A
Source: 0001477932-25-007791
Chunk: 241

Company: CN ENERGY GROUP. INC.
Filing Date: 2025-10-29
Form: F-1/A
Chunk 241
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 and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or future deductibility is uncertain.

ASC 740-10-25 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There were no material uncertain tax positions as of March 31, 2025 and September 30, 2024. As of March 31, 2025, the tax returns for the calendar years ended December 31, 2016 through December 31, 2024 for the Company’s subsidiaries remain open for statutory examination by tax authorities.

| F-44 |

Note 2 - Summary of significant accounting policies (Continued)

Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable or receivable net of payments in the accompanying consolidated financial statements. All of the VAT returns filed by the Company’s subsidiaries in the PRC, have been and remain subject to examination by the tax authorities for five years from the date of filing.

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and restricted cash, accounts receivable, advances to suppliers, other receivables and loan to a third party. All of the Company’s cash is maintained with banks within the PRC. Cash maintained in banks within the PRC of less than RMB500,000 (approximately $71,249) per bank are covered by “deposit insurance regulation” promulgated by the State Council of the PRC. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. The Company has not experienced any losses in such accounts. A significant portion of the Company’s sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The