Company: GCL
Filing Date: 2025-09-04
Form Type: F-1
Source: 0001213900-25-084489
Chunk: 199

Company: GCL Global Holdings Ltd
Filing Date: 2025-09-04
Form: F-1
Chunk 199
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 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 March 31, 2025
and 2024, no impairment of long-lived assets was recognized.

F-14 GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Derivative asset In connection with the share sale and purchase Agreement (“2Game SPA”) executed on March 19, 2025 between the Company and 2Game’s minority shareholders, for the acquisition of an additional 10% controlling interest in 2Game, the Company recognized a derivative asset related to a contractual buy-back option and obligation (“Buy-Back Feature”) embedded in the agreement. Under the terms of the agreement, the Company has the sole discretion to exercise the buy-back option or may enforce a buy-back obligation requiring the minority shareholders of 2Game to repurchase the acquired shares at a specified premium if certain financial targets are not met within the twelve months ended March 31, 2026. In accordance with ASC 815-40 “Derivatives and Hedging,” the Company determined that the Buy-Back Feature met the definition of a derivative, and therefore need to bifurcate and separately accounted for. As a result, the Buy-Back feature is recognized as a derivative asset, measured initially and subsequently at fair value, with changes in fair value recognized in the consolidated statements of operations and comprehensive income (loss) in each reporting period until the obligation is settled or expires. Contingent consideration for acquisitions In connection with the business combination set forth in Note 4, 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-