Company: ZCARW
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076590
Chunk: 18

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 18
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3) the Company has the right to direct the use of the asset. A lease is classified as a finance
lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the
lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the
remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value
of the asset.

Operating leases are presented
within “Operating lease right-of-use assets,” “Current portion of operating lease liabilities” and “Operating
lease liabilities, less current portion” in the Company’s condensed consolidated balance sheets. The current portion of finance
lease liabilities are presented within “Finance lease liabilities” in the Company’s condensed consolidated balance sheets.

ROU assets represent the Company’s
right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments
arising from the lease arrangement. Lease liabilities are recognized at commencement date based on the present value of lease payments
over the lease term. Operating lease ROU assets are recognized at commencement date in an amount equal to lease liability, adjusted for
any lease prepayments, initial direct costs, and lease incentives. For leases in which the rate implicit in the lease is not readily determinable,
the Company uses its incremental borrowing rate based on the information available at commencement date. Lease terms includes the effects
of options to extend or terminate the lease when it is reasonably certain at commencement of the lease that the Company will exercise
that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term reflecting single
operating lease cost. The Company evaluates lease agreements to determine lease and non-lease components, which are accounted for separately.

14

ZOOMCAR HOLDINGS, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Lease payments that depend on
factors other than an index or rate are considered variable lease payments and are excluded from the operating lease assets and liabilities
and are recognized as expense in the period in which the obligation is incurred. The Company accounts for lease-related concessions in
accordance with guidance in Topic 842, Leases, to determine, on a lease-by-lease basis, whether the concession provided by lessor should
be accounted for as a lease modification