Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 149

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 19
Chunk 149
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 contains a lease, the Company assess whether the contract involves the use of an identified asset, whether it has the right to
obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset.

Financing
lease and operating lease as Lessee

The
Company classifies a lease as a financing lease at lease commencement when the lease meets any one of the criteria:

a.
The lease transfers ownership of the underlying asset to the lessee by the end of the lease term.

b.
The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

c.
The lease term is for a major part of the remaining economic life of the underlying asset.

d.
The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the
lease payments equals or exceeds substantially all the fair value of the underlying asset.

e.
The underlying asset is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the
lease term.

When
none of the criteria are met, the Company classifies a lease as an operating lease.

For
both operating and financing leases, the Company records a lease liability and corresponding right-of-use (ROU) asset at lease commencement.
Lease terms are based on the non-cancellable term of the lease and may contain options to extend the lease when it is reasonably certain
that the Company will exercise the option. Lease liabilities represent the present value of the lease payments not yet paid, discounted
using the discount rate for the lease at lease commencement.

The
Company estimates its incremental borrowing rate for its leases at the commencement date to determine the present value of future lease
payments when the implicit rate is not readily determinable in the lease. In estimating its incremental borrowing rate, the Company considers
its credit rating and publicly available data of borrowing rates for loans of similar amount, currency and term as the lease.

Operating
leases are presented as “operating lease right-of-use assets, net” and “operating lease liabilities”. Lease liabilities
that become due within one year of the balance sheet date are classified as current liabilities. At lease commencement, right-of-use
assets represent the right to use underlying assets for their respective lease terms and are recognized at amounts equal to the lease
liabilities adjusted for any lease payments made prior to the lease commencement date, less any lease incentives received and any initial