Company: LRHC
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0001213900-25-048370
Chunk: 12

Company: La Rosa Holdings Corp.
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 1
Chunk 12
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 Interest Entity (VIE) is a legal entity in which an investor holds a controlling
interest that is not based on majority voting rights. 

In January 2025, the FASB issued ASU 2025-01,
Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)- Clarifying the Effective
Date. The amendment in this Update amends the effective date of Update 2024-03 to clarify that all public business entities are required
to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods
beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of this new standard will have on
its consolidated financial statements.

Note 2 — Business Combinations

The Company completed a number of acquisitions
in the first quarter of 2024. The results of businesses acquired in a business combination are included in the Company’s condensed
consolidated financial statements from the date of acquisition. The Company allocates the purchase price, which is the sum of the consideration
provided and may consist of cash, equity, or a combination of the two, to the identifiable assets and liabilities of the acquired business
at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities,
if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant
judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates,
and selection of comparable companies.

7

La Rosa Holdings Corp. and Subsidiaries

Notes to the Unaudited Condensed Consolidated
Financial Statements

To date, the assets acquired and liabilities assumed
in the Company’s business combinations have primarily consisted of goodwill and finite-lived intangible assets, consisting primarily
of franchise agreements, agent relationships, real estate listings, non-compete agreements, and right-of-use assets. The estimated fair
values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating
performance and cash flows of the acquired business, the nature of the business acquired, and the specific characteristics of the identified
intangible assets. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could
change due to numerous factors, including market conditions, technological developments, economic conditions and competition. In