Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 1727

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 9A
Chunk 1727
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 contract support and fixed fee professional services that are separate
performance obligations.  For the Company’s professional services, revenue is recognized over time, generally using costs
incurred or hours expended to measure progress. Judgment is required in estimating project status and the costs necessary to complete
projects. A number of internal and external factors can affect these estimates, including labor rates, utilization, specification variances
and testing requirement changes.

If
a group of agreements are entered at or near the same time and so closely related that they are, in effect, part of a single arrangement,
such agreements are deemed to be combined as one arrangement for revenue recognition purposes. The Company exercises significant
judgment to evaluate the relevant facts and circumstances in determining whether agreements should be accounted for separately or as
a single arrangement. The Company’s judgments about whether a group of contracts comprise a single arrangement can affect the allocation
of consideration to the distinct performance obligations, which could have an effect on results of operations for the periods involved.

If
a contract includes variable consideration, the Company exercises judgment in estimating the amount of consideration to which the entity
will be entitled in exchange for transferring the promised goods or services to a customer. When estimating variable consideration, the
Company will consider all relevant facts and circumstances. Variable consideration will be estimated and included in the contract price
only when it is probable that a significant reversal in the amount of revenue recognized will not occur.

Contract
Balances  

The
timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in
receivables, contract assets (revenues in excess of billings), or contract liabilities (unearned revenue) on the Company’s Consolidated
Balance Sheets. The Company records revenues in excess of billings when the Company has transferred goods or services but does not yet
have the right to consideration. The Company records unearned revenue when the Company has received or has the right to receive
consideration but has not yet transferred goods or services to the customer.

The
revenues in excess of billings are transferred to receivables when the rights to consideration become unconditional, usually upon completion
of a milestone.

The
Company’s revenues in excess of billings and unearned revenue are as follows:

 SCHEDULE
OF REVENUES IN EXCESS OF BILLINGS AND DEFERRED REVENUE

    As
    of  
    As
    of 

    June