Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 299

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 299
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-contract consulting
and training service, technical support service and software upgrade service. There is no variable consideration for the contract price.
Revenue derived from PCS service, technical support service and upgrade service are not material.

Principal and Agent Considerations

GAAP requires us to evaluate, using a control
model, whether the Company itself promises to provide services to the customers (as a principal) or to arrange for services to be provided
by another party (as an agent). The company controls the software and the service before it transfers to the customer. The company is
a principal as it is primarily responsible for fulfilling the promise to provide the specified software and services. Based on the Company’s
evaluation using a control model, the Company determined that in all of its major business activities, it serves as a principal rather
than an agent within their revenue arrangements.

Contract costs

Contract costs include contract acquisition costs
and contract fulfillment costs which are all recorded within prepayments, deposits, and other assets in the consolidated balance sheets.

Contract acquisition costs consist of incremental
costs incurred by the Company to originate contracts with customers. Contract acquisition costs, which generally include costs that are
only incurred as a result of obtaining a contract, are capitalized when the incremental costs are expected to be recovered over the contract
period. All other costs incurred regardless of obtaining a contract are expensed as incurred. Contract acquisition costs are amortized
over the period the costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract
term, on a basis consistent with the transfer of goods or services to the customer to which the costs relate. Contract fulfillments costs
consist of costs incurred by the Company to fulfill a contract with a customer and are capitalized when the costs generate or enhance
resources that will be used in satisfying future performance obligations of the contract and the costs are expected to be recovered.
Capitalized contract fulfillment costs generally include contracted services, direct labor, materials, and allocable overhead directly
related to resources required to fulfill the contract. Contract fulfillment costs are recognized in cost of revenue during the period
that the related costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract term,
on a basis consistent with the transfer of goods or services to the customer to which the costs are related. There were no contract acquisition
costs and fulfillment costs as of September 30, 2024 and 2023.

Contract balance

When a revenue contract has been performed, the
Company presents the contract in