Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 211

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 211
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”).

Transactions denominated in currencies other than
functional currency are translated into functional currency at the exchange rates quoted by authoritative banks prevailing at the dates
of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than
the functional currency are recorded as “ Foreign currency exchange gain/(loss), net” in the consolidated statements of operations
and comprehensive loss.

The consolidated financial statements of the Company
are translated from the respective functional currencies into RMB. Assets and liabilities are translated into RMB using the applicable
exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the
appropriate historical rates. Revenues, expenses, gains and losses are translated into RMB using the periodic average exchange rates.
The resulting foreign currency translation adjustments are recorded in accumulated other comprehensive loss as a component of shareholders’
equity.

(f) Convenience translation

Translations of the consolidated financial statements
from RMB into US$ for the year ended December 31, 2024 are solely for the convenience of the readers and were calculated at the rate
of US US$1.00=RMB7.2993, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs
purposes by the Federal Reserve Bank of New York on December 31, 2024. No representation is made that the RMB amounts could have been,
or could be, converted, realized or settled into US$ at that rate on December 31, 2024, or at any other rate.

The US$ convenience translation is not required
under U. S. GAAP and all US$ convenience translation amounts in the accompanying consolidated financial statements are unaudited.

F-28

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

(g) Commitments and Contingencies

In the normal course of business, the Company
is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters,
including, among others, government investigations, shareholder lawsuits, and non-income tax matters. An accrual for a loss contingency
is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If a potential
material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, together with an estimate of the range of possible loss