Company: SDAWW
Filing Date: 2025-10-27
Form Type: 6-K
Source: 0001213900-25-102611
Chunk: 38

Company: SunCar Technology Group Inc.
Filing Date: 2025-10-27
Form: 6-K
Chunk 38
---
 assess collectability by reviewing accounts receivable on a collective basis where similar characteristics exist, primarily based on similar business lines, and on an individual basis when we identify specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, we consider historical collectability based on past due status, the age of the accounts receivable balances, credit quality of our customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect our ability to collect from customers. For the six months ended June 30, 2024 and 2025, we recognized credit losses of US$2.7 million and US$6.3 million, respectively. A 10% increase in our credit losses provision would have increased our loss before income tax by 0.4% and 12.0% for the six months ended June 30, 2024 and 2025, respectively. Valuation Allowance of Deferred Tax Assets Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. We consider positive and negative evidence when determining whether a portion or all of our deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods, our experience with tax attributes expiring unused, and our tax planning strategies. The ultimate realization of deferred tax assets is dependent upon our ability to generate sufficient future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization of deferred tax assets, we have considered possible sources of taxable income including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected within the industry. 4 For the six months ended June 30, 2024 and 2025, we reduced the valuation allowance of deferred tax assets of US$0.5 million and recognized the valuation allowance of US$0.8 million, respectively. A 10% increase in our valuation allowance of deferred tax assets would have decreased net losses by 0.1% and increased net