Company: FWDI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001683168-25-006141
Chunk: 14

Company: Forward Industries, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 14
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 products provided, net of allowances taken by
retailers for product returns and any taxes collected from customers that would be remitted to governmental authorities. When the Company
received consideration before achieving the criteria previously mentioned, it recorded a contract liability, which was classified as a
component of deferred income in the accompanying condensed consolidated balance sheets. The retail distribution segment had no contract
liabilities at June 30, 2025 or September 30, 2024. The results of operations of the retail segment are reported as discontinued operations
for the three and nine months ended June 30, 2025 and 2024. See Note 3.

Design Segment

The Company applies the “cost
to cost” and “right to invoice” methods of revenue recognition to the contracts with customers in the design segment.
The design segment typically engages in two types of contracts: (i) time and material and (ii) fixed price. The Company recognizes revenue
over time on its time and material contracts utilizing a “right to invoice” method. Revenues from fixed price contracts that
require performance of services that are not related to the production of tangible assets are recognized by using cost inputs to measure
progress toward the completion of its performance obligations, or the “cost to cost” method. Revenues from fixed price contracts
that contain specific deliverables are recognized when the performance obligation has been satisfied or the transfer of goods to the customer
has been completed and accepted.

Recognized revenues that
will not be billed until a later date are recorded as contract assets in the accompanying condensed consolidated balance sheets. The design
segment had contract assets of $725,000, $1,273,000 and $976,000 at June 30, 2025, September 30, 2024 and September 30, 2023, respectively.
Contracts where collections to date have exceeded recognized revenues, or contract liabilities, are recorded as a liability and classified
as a component of deferred income in the accompanying condensed consolidated balance sheets. The design segment had contract liabilities
of $310,000, $399,000, and $297,000 at June 30, 2025, September 30, 2024 and September 30, 2023, respectively.

Fair Value Measurements

We perform fair value measurements in accordance
with the guidance provided by ASC 820, “Fair Value Measurement.” ASC 820 defines fair value as the price that would be received
from selling an asset or paid to transfer a liability in an orderly