Company: KG
Filing Date: 2025-03-26
Form Type: 424B3
Source: 0001104659-25-028251
Chunk: 232

Company: Kestrel Group Ltd
Filing Date: 2025-03-26
Form: 424B3
Chunk 232
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 on its carriers in exchange for a fee. These agreements may also include other provisions, such as minimum fee arrangements or cancellation provisions, which may impact revenue recognition.

Capacity distribution fees are collected from program managers or MGAs for providing support services and granting contractual access to our insurance carrier network and are considered a single performance obligation. Support services provided for these insurance and reinsurance brokerage arrangements include compliance and regulatory reporting and administrative support which culminates in the placement of bound insurance coverage. Kestrel considers these arrangements a single revenue stream.

#### Accounts Receivable
Accounts receivable are recorded at net realizable value. Accounts receivable are presented net of an allowance for doubtful accounts, which is an estimate of expected losses. In determining the amount of the reserve, Kestrel makes judgments about the creditworthiness of significant customers based on known delinquent activity or disputes and ongoing credit evaluations in addition to evaluating the historical loss rate on the pool of receivables.

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#### Impairment of Long-Lived Assets
Long-lived assets are tested for recoverability whenever events or changes in the business environment indicate that the carrying amount of the assets may not be fully recoverable. Factors considered by Kestrel when deciding when to perform an impairment review include significant underperformance of the business against expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. An impairment loss would be recognized when estimated undiscounted future cash flows resulting from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its current fair value. Kestrel management believes the carrying value of long-lived assets are recoverable and no impairments were recorded during the years ended December 31, 2024 and 2023.

#### Income taxes
Kestrel has elected to be treated as a partnership for federal and, if applicable, state and local tax purposes and is not directly subject to income taxes under the provisions of the Code and applicable state laws. Therefore, taxable income or loss is reported to the members for inclusion in their respective tax returns.

Income taxes related to Kestrel Service Corporation are provided for the tax effects of transactions reported in the consolidated financial statements. Deferred tax assets and liabilities, if significant, are recognized for the estimated future tax effects attributed to temporary differences between the book and tax basis of assets and liabilities and carryforward items. The measurement of current and deferred tax assets