Company: GCL
Filing Date: 2025-03-17
Form Type: DRS
Source: 0001213900-25-024502
Chunk: 243

Company: GCL Global Holdings Ltd
Filing Date: 2025-03-17
Form: DRS
Chunk 243
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of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the reporting
unit’s carrying amount exceeds its fair value. If fair value exceeds the carrying amount, no impairment should be recorded. Any
loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

When measuring a goodwill impairment loss, an entity
should consider the income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit. The ASU contains
an illustration of the simultaneous equations method to demonstrate this, which reflects a deferred tax benefit from reducing the carrying
amount of tax-deductible goodwill relative to the tax basis.

An entity may still perform the optional qualitative
assessment for a reporting unit to determine if it is more likely than not that goodwill is impaired. However, this ASU eliminates the
requirement to perform a qualitative assessment for any reporting unit with zero or negative carrying amount. Therefore, the same one-step
impairment assessment will apply to all reporting units.

For the year ended March 31, 2024, management
evaluated the recoverability of goodwill by comparing the fair value of a reporting unit with its carrying amount. The Company had engaged
with a third-party appraiser in assessing the fair value of the game distribution reporting unit by applying income approach which considers
the present value of the game distribution reporting unit’s future after-tax cash flows, discounting them to present value using
a 13.0% discount rate. As a result, the fair value of the game distributing reporting unit’s fair value exceeds its carrying value,
and therefore, no impairment loss on goodwill was recognized for the years ended March 31, 2024.

For the years ended March 31, 2023, management
evaluated the recoverability of goodwill by performing qualitative assessment on its reporting units and determined that it is not
more likely than not that the fair value of the reporting unit is less than its carrying amount, and therefore, no impairment loss on
goodwill was recognized for the years ended March 31, 2023.

In accordance with ASC 360-10, long-lived assets,
including property and equipment with finite lives, are reviewed for impairment loss whenever events or changes in circumstances (such
as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of
an asset may not be recoverable. The Company assesses the recoverability of the assets based on the