Company: SPPL
Filing Date: 2025-04-08
Form Type: 20-F
Source: 0001641172-25-003217
Chunk: 71

Company: SIMPPLE LTD.
Filing Date: 2025-04-08
Form: 20-F
Item: Item 5
Chunk 71
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 assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results
could differ from those estimates. On an ongoing basis, management reviews its estimates and, if deemed appropriate, those estimates
are adjusted. Significant estimates include those related to assumptions used in valuing reserves of uncollectible accounts receivable,
assumptions used in valuing assets acquired in business acquisitions, impairment testing of intangible assets and other long-term assets,
the valuation allowance for deferred tax assets, accruals for potential liabilities, and assumptions used in the determination of the
Company’s liquidity.

Revenue
Recognition

The
Company recognizes revenue in accordance with FASB Accounting Standards Codification (“ ASC”) 606, Revenue from Contracts
with Customers (“ ASC 606”).

For
any service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in advance
of the performance obligation.

Government
subsidies

Government
subsidies are not recognized until there is reasonable assurance that the Company will comply with the conditions of the subsidy and
the Company will receive the subsidy. Generally, government subsidies fall into two categories: subsidies related to income and subsidies
related to assets. Subsidies related to income are recognized in the period that the recognition criteria are met, and are presented
as a reduction of the related expense that they are intended to subsidize within operating expenses in the combined statements of operations
and comprehensive income. Subsidies related to assets are for the purchase, construction or other acquisition of long-lived assets and
are recognized as reductions to the capitalized costs of the related assets.

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Business
combinations

The
Company accounts for its business combinations using the acquisition method of accounting where the purchase consideration is allocated
to the tangible and intangible assets acquired, and liabilities assumed, based on their respective fair values as of the acquisition
date. Contingent purchase consideration is recorded at fair value at the date of acquisition. The excess of the fair value of the purchase
consideration over the estimated fair values of the net assets acquired is recorded as goodwill. When determining the fair values of
assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible
assets. Critical estimates in valuing intangible assets include, but are not limited to, expected future cash flows, which includes consideration
of future growth and margins, future changes in technology, and discount rates. Fair value