Company: CHOW
Filing Date: 2025-03-19
Form Type: DRS/A
Source: 0001493152-25-010898
Chunk: 218

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-03-19
Form: DRS/A
Chunk 218
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Note 
 2(e))     |           |   |
| Accounts receivable                            |     |                    | 23,213,963 |   |     |      | 16,178,935 |   |     |           | 2,074,222 |   |
| Less: allowance for the expected credit losses |     |                    |   (842,674 | ) |     |      |   (493,720 | ) |     |           |   (63,297 | ) |
| Net accounts receivable                        |     |                    | 22,371,289 |   |     |      | 15,685,215 |   |     |           | 2,010,925 |   |

Movement in the Allowance for Expected Credit Losses

The movement in the allowance for expected credit losses for the years ended December 31, 2022 and 2023 is as follows:

|                       |     | As of December 31, |         |     |      |          |   |     |           |         |   |
|                       |     |               2022 |         |     | 2023 |          |   |     |           |         |   |
|                       |     |                HK$ |         |     |  HK$ |          |   |     | US$ (Note 
 2(e))     |         |   |
| Beginning balance     |     |                    |       - |     |      |  842,674 |   |     |           | 108,035 |   |
| Addition / (Reversal) |     |                    | 842,674 |     |      | (348,954 | ) |     |           | (44,738 | ) |
| Ending balance        |     |                    | 842,674 |     |      |  493,720 |   |     |           |  63,297 |   |

The Company utilizes a portfolio analysis approach to estimate the allowance for expected credit losses, grouping accounts receivable into pools based on shared risk characteristics such as customer type, geographic location, industry, and historical payment patterns. The allowance for expected credit losses is determined using historical loss rates, adjusted for current conditions and reasonable, supportable forward-looking information, including macroeconomic factors such as industry trends, market volatility, and the broader economic environment.

The Company monitors credit risk on a portfolio basis and evaluates the adequacy of the allowance for expected credit losses on a quarterly basis. Any