Company: RIVF
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024216
Chunk: 62

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 62
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 be less than its unamortized costs. If the Company determines that the fair value of a film is less than its unamortized production
costs, then the unamortized capitalized costs for the film will be written down by the amount exceeding the film’s fair value.
The unit of account for impairment testing is the individual film being produced and the fair value is determined using a discounted
cash flow technique.

Recognition
of Revenue from Contracts with Customers

The
Company recognizes revenue from its contracts with customers in accordance with the core principle outlined in ASC 606, Revenue from
Contracts with Customers. Specifically, “to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which we expect to be entitled in exchange for those goods or services”. To that extent, the Company
recognizes revenue in accordance with the ASC Topic by applying the following five steps:

●Step
                                            1-Identify the contract(s) with a customer

●Step
                                            2-Identify the performance obligations in the contract

●Step
                                            3-Determing the transaction price

●Step
                                            4-Allocate the transaction price to the performance obligations in the contract

●Step
                                            5-Recognize revenue when (or as) the Company satisfies a performance obligation

19

The
Company’s contracts with its customers currently contain a single performance obligation comprised of a license to motion picture
rights. In accordance with ASC 606, the Company ( i.e. the “licensor”) has concluded that the license transfer should i)
be considered functional intellectual property and ii) that customers (the “licensees” or “distributors”) are
therefore granted a right to access of the Company’s intellectual property throughout the license period. As such, revenue is recognized
at a point in time upon the Company’s delivery of the license to the licensee. The Company does not currently provide any form
of extended payment terms to its customers and, as such, a fixed payment is typically received from the customer within 90 days after
the license is transferred.

In
determining the transaction price, the Company’s contracts with its customers do not include a significant financing component,
non-cash consideration or consideration payable to the customer. However, the Company’s contracts typically will include sales-based
or usage-based royalties that are triggered by the attainment of certain levels of box office receipts or video on demand (“VOD”)
purchases. To that extent,