Company: WCT
Filing Date: 2025-05-16
Form Type: 20-F
Source: 0001213900-25-044576
Chunk: 37

Company: Wellchange Holdings Co Ltd
Filing Date: 2025-05-16
Form: 20-F
Item: Item 4A
Chunk 37
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 to use. No significant costs were incurred
to update or upgrade the software during the years ended December 31, 2022, 2023 and 2024. There is no maintenance
services attached in the contract.

The revenue from subscription services is recognized
over the contract term as clients receive and consume benefits of such services as provided. Accordingly, the Company recognizes revenues
from subscription services on a monthly basis when it satisfies its performance obligations throughout the contract terms.

Accounts receivable, net

Accounts receivable mainly represent amounts due from customers for
provision of cloud-based SaaS services from subscription which are recorded net of allowance for the Company’s expected credit losses.
The Company generally grant credit terms of 90 days to the clients. In evaluating the collectability of receivable balances, the
Company considers specific evidence including aging of the receivable, the client’s payment history, its current creditworthiness
and current economic trends and customer specific quantitative and qualitative factors that may affect our customers’ ability to
pay. The Company regularly reviews the adequacy and appropriateness of the allowance for expected credit losses. Accounts receivable are
written off after all collection efforts have ceased. As of December 31, 2023 and 2024, allowance for expected credit losses was
US$13,864 and US$326,813, respectively.

Lease

ASC 842 supersedes the lease requirements
in ASC 840 “ Leases,” and generally requires lessees to recognize operating and finance lease liabilities and corresponding
right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows
arising from leasing arrangements. All leases in the Company and its subsidiaries (“ Group”) are accounted for as operating
leases.

We determine if an arrangement is a lease at inception.
On our balance sheet, our corporate office lease is included in operating lease right-of-use (ROU) asset, current portion of operating
lease liability and operating lease liability, net of current portion.

ROU assets represent our right to use an underlying
asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease
ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For
leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement
date in determining the present value of lease payments. We use the implicit rate when readily