Company: DTCK
Filing Date: 2025-12-23
Form Type: 6-K
Source: 0001683168-25-009327
Chunk: 16

Company: DAVIS COMMODITIES Ltd
Filing Date: 2025-12-23
Form: 6-K
Chunk 16
---
 certain to
exercise, the Company elected not to apply ASC 842 recognition requirements; and (ii) the Company elected to apply the package of
practical expedients for existing arrangements entered into prior to January 1, 2019 to not reassess (a) whether an arrangement is
or contains a lease, (b) the lease classification applied to existing leases, and (c) initial direct costs.

(s) Finance leases

The Company accounts for leases in accordance
with ASC 842, Leases. At the commencement date of a lease, the Company recognizes a finance lease liability for leases with an initial
term greater than 12 months. Lease liabilities are measured at the present value of lease payments over the lease term, discounted using
the Company’s incremental borrowing rate, unless the implicit rate in the lease is readily determinable.

Leases are classified as finance leases based
on the criteria set forth in ASC 842. For finance leases, the Company recognizes interest expense on the lease liability and depreciation
expense on the leased asset separately in the unaudited interim condensed consolidated statements of operations. Motor vehicles acquired
under finance lease arrangements are recognized as motor vehicles within property, plant and equipment as assets, with a corresponding
finance lease liability recognized on the consolidated balance sheets. The motor vehicles are depreciated over the estimated useful lives.

(t) Income taxes

The Company accounts for income taxes under ASC
740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited
interim condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including
the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

The provisions of ASC 740-10-25, “Accounting
for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for unaudited interim condensed consolidated financial
statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides
guidance on the recognition of income tax assets and liabilities, classification of current and deferred income