Company: CHOW
Filing Date: 2025-08-22
Form Type: F-1/A
Source: 0001641172-25-025146
Chunk: 85

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-08-22
Form: F-1/A
Chunk 85
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| (iii) | No                                                                                                                                  
 Alternative Use and Enforceable Right to Payment: While                                                                             
 the deliverables are tailored to customer-specific requirements, they do not meet the “no                                           
 alternative use” criterion because, in practice, the Company can reconfigure partially                                              
 completed deliverables for other projects, albeit with additional effort.                                                           
 More importantly,                                                                                                                   
 the Company does not have an enforceable right to payment for performance completed to date. Engagement letters typically permit    
 termination at any time without penalty, and payment terms do not obligate the customer to pay for partially completed work.        |

Accordingly, control is transferred to the customer at a point in time, and revenue is recognized at that time.

Contracts with Multiple Promises

The Company frequently enters into contracts with customers that contain multiple promises, including hardware, software, IT application licenses, and IT professional services. To determine whether these promises are distinct within the context of the contract, the Company applies the guidance in ASC 606-10-25-19 through 25-22, which requires an assessment of whether:

| 1. | The                                                                                       
 customer can benefit from the good or service on its own or with other readily available  
 resources; and                                                                            |
| 2. | The                                                                                       
 promise to transfer the good or service is separately identifiable from other promises in 
 the contract.                                                                             |

A promised good or service is not distinct if it is highly interdependent and interrelated with other promises, meaning its function is significantly affected by the other promises in the contract. BC32 of ASC 606 states:

“An entity should assess whether two or more promises in a contract are so highly interrelated and interdependent that they cannot be separated.”

Additionally, BC33(a) and (b) explain that if an entity provides a significant service of integrating multiple items into a combined output, those items are not distinct, as they serve as inputs to a unified deliverable rather than separate obligations.

Based on this guidance, the Company has determined that IT professional services are not distinct from hardware, software, or IT application licenses in certain contracts because they are necessary inputs to delivering a fully integrated IT solution rather than stand-alone deliverables.

Contract Scenarios and Distinctness Evaluation

(i) Sale of Hardware Products with IT Professional Services (e.g., Setup, Development, Customization, or Integration Services)

Nature of Promises & Intended Benefit to the Customer

In contracts where the Company sells hardware products, the hardware provides computing capability to the customer. However,