Company: LGCY
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010844
Chunk: 97

Company: Legacy Education Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 97
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 of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant
items subject to such estimates and assumptions include the evaluation of the Company’s distinct performance obligations, the valuation
of equity instruments and valuation allowances for credit losses related to accounts receivable.

Allowance
for credit losses

We
record an allowance for doubtful credit losses for estimated losses resulting from the inability, failure or refusal of our students
to make required payments, which includes the recovery of financial aid funds advanced to a student for amounts in excess of the student’s
cost of tuition and related fees. We determine the adequacy of our allowance for doubtful accounts based on an analysis of our historical
bad debt experience, current economic trends, and the aging of the accounts receivable and student status. We apply reserves to our receivables
based upon an estimate of the risk presented by the age of the receivables and student status. We write off account receivable balances
of inactive students at the earlier of the time the balances were deemed uncollectible, or one year after the revenue is generated. Bad
debt expense is recorded as a general and administrative expense in the income statement. The Company performs an analysis annually to
determine which accounts are uncollectable and write them off.

5

Impairment
of long-lived assets

We
evaluate the recoverability of our long-lived assets for impairment, other than goodwill, whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets. If such assets are considered
to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair
value of the assets. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows. We
had no long-lived asset impairments as of March 31, 2025 or June 30, 2024, respectively.

Income
taxes

GAAP
requires management to evaluate tax positions taken by us and recognize a tax liability if we have taken an uncertain position that is
more likely