Company: INCR
Filing Date: 2025-05-01
Form Type: 20-F
Source: 0001641172-25-007971
Chunk: 178

Company: Intercure Ltd.
Filing Date: 2025-05-01
Form: 20-F
Item: Item 18
Chunk 178
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 of materials lost in process. Changes in these assumptions may result in significant changes in the value of the biological asset, the value of inventory, and the cost of sales, as well as in the fair value component in respect of the biological asset.
 

F.   Inventory
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Inventory is measured as the lower of either cost or net realizable value. The cost of purchased inventory is determined on a first in – first out (FIFO) basis. The Company classifies the cannabis agricultural produce from a biological asset to inventory when harvesting, according to the fair value less selling costs on that date. This value serves as the cost basis of inventory. Processing costs and other additional costs which materialize in the process of bringing the inventory to its current location and condition are added to the cost of inventory. Net realizable value represents the estimated selling price in the ordinary course of business, less estimated costs to
 
completion and the costs required to execute the sale. The Company periodically evaluates the condition and age of inventory, and provisions for slow inventory are made accordingly. In order to evaluate these provisions, the Company analyzes the expiration rates of the inventory and in accordance recognizes a provision for slow moving inventory.
 
 
F-18
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Note 2 - Material Accounting Policies (Cont.)
 

G.     Revenue  
     recognition
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Revenue from contracts with customers is recognized in the statement of income when the control of the asset or of the service has been transferred to the customer. The control transfer date is generally the date of delivery to the customer. Revenue is measured and recognized according to the fair value of the proceeds which are expected to be received in accordance with the contract terms, less amounts which have been collected for third parties (e.g., taxes). Revenue is recognized in the statements of profit or loss up to the extent to which it is expected to flow to the Company, and the revenue and costs, if relevant, are reliably measurable.
 
When determining the amount of revenue from contracts with customers, the Company evaluates whether it functions as a primary provider, or as an agent in the contract. Revenue is recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Therefore, the amount of revenue recognized is adjusted for expected credits and returns which are estimated based on historical data and past experience.
 
The Company estimates credits and returns according to the rate of actual credits and returns from total sales multiplied by the sales in the last quarter.
 
Product sales
 
In retail sales that are made through pharmacies owned