Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 173

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 18
Chunk 173
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are of high credit quality, it also continually monitors their creditworthiness. The Company and its subsidiaries have not experienced
any losses in such accounts and do not believe the cash is exposed to any significant risk.

Accounts
receivable, net

Accounts
receivable, net are stated at the original amount less an allowance for expected credit loss on such receivables. The allowance for expected
credit loss is estimated based upon the Company’s assessment of various factors including historical experience, the age of the
accounts receivable balances, current general economic conditions, future expectations and customer specific quantitative and qualitative
factors that may affect the Company’s customers’ ability to pay. An allowance is also made when there is objective evidence
for the Company to reasonably estimate the amount of probable loss.

Inventories

Inventories
are stated at the lower of cost or net realizable value. Cost of inventories is determined using the first-in first-out cost method.
Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving, damaged and
lost goods, which is dependent upon factors such as historical and forecasted demand and prevailing market conditions. Write-downs are
recorded in cost of revenues on the consolidated statements of income and comprehensive income.

Prepayments
and deposits

Prepayments
are cash deposited or advanced to suppliers for purchasing goods or services that have not been received or provided and deposits made
to the Company’s customers and landlord. This amount is refundable and bears no interest. Prepayment and deposit are classified
as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically
to determine whether their carrying value has become impaired.

Other
receivables

Other
receivables primarily include rental deposit, value-added tax (“ VAT”) refundable, prepayment and income tax refundable.
Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes
collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts
at collection are made.

Property,
plants and equipment, net

Property,
plants and equipment are stated at cost net of accumulated depreciation and impairment. Depreciation is provided over the estimated useful
lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows:

Schedule
of property, plants, and equipment estimated useful lives

  Classification: