Company: CHOW
Filing Date: 2025-02-10
Form Type: DRS/A
Source: 0001493152-25-005658
Chunk: 220

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-02-10
Form: DRS/A
Chunk 220
---
 to the system developer and other directly attributable costs of preparing the asset for its intended use.

Capitalization Criteria: Development costs are capitalized when they meet the criteria for recognition as an intangible asset under ASC 350. Specifically, only costs incurred during the application development stage are capitalized. Costs incurred to enhance or extend the performance of the asset beyond its original specifications are also capitalized if they meet the recognition criteria. Maintenance costs or costs incurred during the preliminary project stage are expensed as incurred.

Following initial recognition, the intangible asset is carried at cost less accumulated amortization and any accumulated impairment losses. The asset is amortized on a straight-line basis over its estimated useful life of 5 years, reflecting the period over which the Company expects to derive economic benefits from the asset.

As of December 31, 2022 and 2023, the balances of the intangible asset are as follows:

|                                                  |     | As of December 31, |           |     |      |           |   |     |                 |         |   |
|                                                  |     |               2022 |           |     | 2023 |           |   |     |                 |         |   |
|                                                  |     |                HK$ |           |     |  HK$ |           |   |     | US$ (Note 2(e)) |         |   |
| Information technology service management system |     |                    | 1,268,330 |     |      | 2,206,846 |   |     |                 | 282,929 |   |
|                                                  |     |                    | 1,268,330 |     |      | 2,206,846 |   |     |                 | 282,929 |   |
| Less: Accumulated amortization                   |     |                    |         - |     |      |  (378,801 | ) |     |                 | (48,564 | ) |
| Intangible asset, net                            |     |                    | 1,268,330 |     |      | 1,828,045 |   |     |                 | 234,365 |   |

The increase in the intangible asset during 2023 represents additional development costs incurred to enhance and expand the system’s functionality, reflecting the Company’s ongoing investment in its proprietary software platform.

Amortization: Amortization of the intangible asset began in 2023 when the asset was ready for its intended use. The timing of amortization reflects the asset’s readiness