Company: AOSL
Filing Date: 2025-08-28
Form Type: 10-K
Source: 0001628280-25-041297
Chunk: 16

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-08-28
Form: 10-K
Item: Item 15
Chunk 16
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able.  When evaluating long-lived assets, if the Company concludes that the estimated undiscounted cash flows attributable to the assets are less than their carrying value, the Company recognizes an impairment loss based on the excess of the carrying amount of the assets over their respective fair values, which could adversely affect its results of operations.During the fiscal year ended June 30, 2025, the Company identified certain purchased manufacturing equipment that was unable to meet its production process requirements.  Because the equipment had no alternative uses, the Company recorded an impairment of $1.0 million related to such equipment.  There was no impairment of long-lived assets for fiscal years 2024 and 2023. Revenue RecognitionThe Company determines 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.  The Company recognizes revenue at a point in time when its performance obligation has been satisfied and control of the product is transferred to the customer, as determined by the agreed upon shipping terms, net of estimated stock rotation returns and price adjustments that it expects to provide to certain distributors.  The Company presents revenue net of sales taxes and any similar assessments.  Our standard payment terms range from 30 to 60 days.The Company sells its products primarily to distributors, who in turn sell the products globally to various end customers. Sales to most distributors are made under terms allowing certain price adjustments of the Company’s products held in their inventory or upon sale to their end customers. Revenue from sales to distributors is recognized upon the transfer of control to the distributor. In the ordinary course of business, our distributors may need to sell our products to end customers at prices below the standard distribution price in order to remain competitive and secure sales. After the distributors sell the Company’s products to their end customers, the distributors submit a “ship-and-debit” price adjustment claim to the Company to adjust the distributor’s cost from the standard price to the pre-approved lower price. After the Company verifies that the claim was pre-approved, a credit memo is issued to the distributors for the ship-and-debit claim. In determining the transaction price, the Company considers ship-and-debit price adjustments to be variable consideration. The Company estimates the variable consideration of the allowance for price adjustments at the time revenue is recognized.