Company: OMQS
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001813
Chunk: 1045

Company: OMNIQ Corp.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 14
Chunk 1045
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 ROU assets and liabilities are recognized at
the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide the lessor’s
implicit rate, we use our incremental borrowing rate (“IBR”) at the commencement date in determining the present value of
lease payments by utilizing a fully collateralized rate for a fully amortizing loan with the same term as the lease.

Lease
terms include options to extend the lease when it is reasonably certain those options will be exercised. Our leases can include rental
escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when such renewal
options and/or termination options are reasonably certain of exercise.

An
ROU asset is subject to the same impairment guidance as assets categorized as property and equipment. As such, any impairment loss on
ROU assets is presented in the same manner as an impairment loss recognized on other long-lived assets.

A
lease modification is a change to the terms and conditions of a contract that change the scope or consideration of a lease. For example,
a change to the terms and conditions to the contract that adds or terminates the right to use one or more underlying assets, or extends
or shortens the contractual lease term, is a modification. Depending on facts and circumstances, a lease modification may be accounted
as either: (1) the original lease plus the lease of a separate asset(s) or (2) a modified lease. A lease will be remeasured if there
are changes to the lease contract that do not give rise to a separate lease.

Revenue
Recognition

We
determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of
the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the
performance obligations in the contract; and (5) recognition of revenue when, or as, a performance obligation is satisfied.

We
combine contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near
the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract,
or the services are considered a single performance obligation. Our contracts are typically governed by a customer purchase order or
work order. The contract generally specifies the delivery of what constitutes a single performance obligation. If an arrangement involves
multiple performance obligations, the items are analyzed to