Company: EJH
Filing Date: 2025-10-30
Form Type: 20-F
Source: 0001213900-25-104179
Chunk: 197

Company: E-Home Household Service Holdings Ltd
Filing Date: 2025-10-30
Form: 20-F
Item: Item 19
Chunk 197
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 the Company considers the promise to transfer products, each of which
is distinct, to be the identified performance obligations. The Company considers whether the nature of its promise is a performance obligation
to provide the specified goods itself (that is, the entity is a principal) or to arrange for the other party to provide those goods (that
is, the entity is an agent). The Company determines it is a principal and recognizes revenues at the gross amount received for the goods.
The Company controls the specified good before that good is transferred to its customers based on the following indicators: (1) the Company
is primarily responsible for fulfilling the promise to provide the specified good, (2) the Company bears the inventory risk before or
after (i. e., customer has a right of return) the specified good has been transferred to a customer, (3) the Company has discretion in
setting the price for the specified good.

In determining the transaction price, the Company
evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled.
The Company provide its customers with rights to return the sold goods for several days after the customers’ acceptance of the goods
and can reasonably estimates return provision for the goods. The product return provisions are estimated based on (1) historical rates,
(2) specific identification of outstanding returns not yet received from customers and outstanding discounts and claims and (3) estimated
returns, discounts and claims expected, but not yet finalized with customers. The Company analyzed historical refund claims for defective
products and concluded that they have been immaterial since the Company can return the goods returned from the customers to its suppliers.

Revenues are reported net of all VAT. As the Company’s
standard payment terms are less than one year, the Company has elected the practical expedient under ASC 606-10-32-18 to not assess whether
a contract has a significant financing component. The Company allocates the transaction price to each distinct product based on their
relative standalone selling price.

Revenue is recognized when control of the product
is transferred to the customer (i. e., when the Company’s performance obligation is satisfied at a point in time), which typically
occurs at delivery. Prices are determined based on negotiations with the Company’s customers when signing the contracts and are
not subject to adjustment.

Cost of revenues

Cost of revenues consists of service fees paid
to staff, outlets, suppliers and the cost of accessories sold.

Government subsidies

Government subsidies as the compensation for expenses