Company: GCL
Filing Date: 2025-03-17
Form Type: DRS
Source: 0001213900-25-024502
Chunk: 311

Company: GCL Global Holdings Ltd
Filing Date: 2025-03-17
Form: DRS
Chunk 311
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 circumstances (such as a significant adverse change to market conditions that will impact the future use of the
assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based
on the undiscounted future cash flows the assets are expected to generate and recognizes an impairment loss when estimated undiscounted
future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are
less than the carrying value of the assets. If an impairment loss is identified, the Company will reduce the carrying amount of the asset
to its estimated fair value based on a discounted cash flows approach, or, when available and appropriate, comparable market values.
As of September 30, 2024 and March 31, 2024, no impairment of long-lived assets was recognized.

In
connection with the business combination set forth in Note 3, the Company recognized contingent consideration for acquisition upon completion
of the business combination in accordance with ASC 805-10-55-28. The Company determined the fair value of the contingent consideration
for acquisition as the Company has the obligation to pay cash or issuing shares to settle the contingent consideration upon 2Game’s
achievement of certain performance milestones.

In
accordance with ASC 815-40 “Derivatives and Hedging”, the Company determined that the contingent consideration for acquisition
should classified as a liability as it does not consider indexed to the Company’s stock. As a result, the contingent consideration
for acquisition shall be measured initially, and subsequently at fair value on each reporting date. The Company will continue to adjust
the carrying value of the contingent consideration for acquisitions until contingency is finally determined. Any changes in fair value
will be recorded as a gain or loss in the statements of operations and comprehensive loss.

Contingent
consideration for acquisition was valued at the time of acquisitions and each of the financial statement date, using unobservable inputs
and discounted cash flow methodology. The determination of the fair value is based on discounted cash flows, the key assumptions include
the probability of meeting each performance target and the discount factor.

The
Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing
Liabilities from Equity”, where equity interests are determined to be conditionally redeemable upon the occurrence of certain events
that are not solely within the control of the Group, and upon such event, the shares would become redeem