Company: NTWK
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021835
Chunk: 13

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.
The standard requires disclosure of specified information about certain costs and expenses, including purchases of inventory, employee
compensation, depreciation, and intangible asset amortization from each relevant expense caption. The amendments are effective for annual
reporting periods beginning after December 15, 2026, which corresponds to the Company’s fiscal year 2028 and interim periods beginning
after December 15, 2027, which corresponds to the Company’s first quarter of fiscal 2029. Early adoption and retrospective application
are permitted but not required. The Company plans to adopt the standard and make the required disclosures beginning in fiscal year 2028
for annual periods and in Q1 of fiscal 2029 for interim periods. The Company expects the adoption of this ASU to result in additional
disclosures but does not anticipate any impact on its financial position, results of operations, or cash flows.

    Page 11

NETSOL
TECHNOLOGIES, INC.

Notes
to Condensed Consolidated Financial Statements

September
30, 2025

(Unaudited)

All
other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

NOTE
3 – REVENUE RECOGNITION

The
Company determines revenue recognition through the following steps:

●Identification
                                            of the contract, or contracts, with a customer;

●Identification
                                            of the performance obligations in the contract;

●Determination
                                            of the transaction price;

●Allocation
                                            of the transaction price to the performance obligations in the contract; and

●Recognition
                                            of revenue when, or as, the Company satisfies a performance obligation.

The
Company records the amount of revenue and related costs by considering whether the entity is a principal (gross presentation) or an agent
(net presentation) by evaluating the nature of its promise to the customer. Revenue is presented net of sales, value-added and other
taxes collected from customers and remitted to government authorities.

The
Company has two primary revenue streams: core revenue and non-core revenue.

Core
Revenue

The
Company generates its core revenue from the following sources: (1) software licenses, (2) services, which include implementation and
consulting services, and (3) subscription and support, which includes post contract support, of its enterprise software solutions for
the lease and finance