Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 154

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 19
Chunk 154
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 Germany and China revenues are generated mainly in U. S. dollars. In addition, a substantial portion of the
Company’s’ operational costs are incurred in U. S. dollars. The Company’s management believes that the U. S. dollar is
the primary currency of the economic environment in which the Company operates. Thus, the functional and reporting currency of the Company
is the U. S. dollar. The functional currency of Vision is Euro, as Euro is the currency of the primary economic environment in which the
operations of Vision and its subsidiaries are conducted and almost all of Vision’s operational expenses, as well as its financing
are in Euro.

Transactions and
balances, related to the Company’s and its subsidiaries in US, Germany and China, originally denominated in U. S. dollars are presented
at their original amounts. Balances in non- U. S. dollar currencies are translated into U. S. dollars using historical and current exchange
rates for non-monetary and monetary balances, respectively. For non-U. S. dollar transactions and other items in the statements of income
(indicated below), the following exchange rates are used: (i) for transactions - exchange rates at transaction dates or average
exchange rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization) - 
historical exchange rates. Currency transaction gains and losses are presented in financial income or expenses, as appropriate.

F-10

GAUZY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(U. S. dollars in thousands, except share and per
share amounts)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES(continued):

The financial statements
of Vision and its subsidiaries are included in the consolidated financial statements, translated into U. S. dollars. Assets and liabilities
are translated at year-end exchange rates, while revenues and expenses are translated at yearly average exchange rates during the year.
Differences resulting from translation of assets and liabilities are presented as other comprehensive loss.

  Principles of consolidation  

The consolidated
financial statements include the accounts of the Company and its controlled subsidiaries. Intercompany balances and transactions have
been eliminated upon consolidation.

  Cash and cash equivalents and restricted cash  

The Company considers
as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original maturities of three
months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known