Company: AGCC
Filing Date: 2025-09-04
Form Type: F-1/A
Source: 0001213900-25-084516
Chunk: 98

Company: Agencia Comercial Spirits Ltd.
Filing Date: 2025-09-04
Form: F-1/A
Chunk 98
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 prospectus, we have not implemented any formal hedging policy or entered into any derivative instruments to mitigate our interest rate risk. Other market risks In addition to currency and interest rate risks, our business operations may be exposed to other market risks, such as commodity price fluctuations, changes in customer demand, or shifts in market conditions. We continuously monitor these risks and implement appropriate risk management strategies to mitigate their potential impact on our financial performance and operations. critical accounting policies and estimates Management uses estimates and assumptions in preparing these combined financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. While all significant accounting policies are more fully described in Note 2 (Summary of significant accounting policies) in our audited combined financial statements, we believe that the following accounting estimates are critical to our business operations and understanding of our financial results. Expected credit losses on account receivables The determination of the appropriate level of expected credit loss on accounts receivables is a critical accounting estimate that requires significant judgment and consideration of various factors.

65 We recognize an allowance for expected credit losses on our accounts receivables based on historical credit loss experience, adjusted for forward -lookingfactors specific to the debtors and the economic environment. We use the simplified approach permitted by the accounting standards, which requires lifetime expected credit losses to be recognized from the initial recognition of the receivables. In estimating the expected credit loss, we consider several factors, including the aging of the accounts receivables, the credit quality and payment history of our customers, current and forecasted economic conditions, and any specific customer or industry -relatedrisks. We also evaluate the need for specific reserves against individual exposures based on the customer’s creditworthiness, past collection history, and other relevant information. The assessment of expected credit losses involves significant judgments and estimates, and actual results may differ from our estimates. We regularly review and update our assumptions and methodologies used in calculating the expected credit loss allowance to ensure they appropriately reflect changes in circumstances and economic conditions. Given the inherent uncertainties and judgments involved in estimating expected credit losses, a change in our assumptions or estimates could result in a material adjustment to the allowance for credit losses and consequently impact our financial results. As of December 31, 2024 and 2023 there was no expected credit loss on account receivables. Inventory Provision The determination of the appropriate level of inventory