Company: CLIK
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001493152-25-019286
Chunk: 67

Company: Click Holdings Ltd.
Filing Date: 2025-10-24
Form: 20-F
Item: Item 5
Chunk 67
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 - contingent consideration asset and impairment of goodwill and intangible
assets.

Financial
asset - contingent consideration asset

The
Company recognizes contingent consideration asset arising from business combinations as a financial asset when it represents a right
to receive a refund or clawback of previously transferred consideration (e. g., from a profit guarantee arrangement). Such assets are
initially measured at fair value on the acquisition date and included for the purpose of calculating goodwill under ASC 805,
Business Combinations.

  37  

Contingent
consideration asset is classified as financial assets under ASC 825, Financial Instruments, and are measured at fair value through
profit or loss. Fair value is determined using valuation techniques such as discounted cash flow models, incorporating probability-weighted
expected cash flows, discount rates reflecting the Company’s incremental borrowing rate or market rates, and other relevant inputs.
Changes in fair value are recognized in the consolidated statements of operations as a component of other income (expense), in the period
of change.

The
Company derecognizes the financial asset upon settlement (e. g., receipt of payment), expiration of the right, or when the asset is transferred
and the transfer qualifies for derecognition.

For
the year ended June 30, 2025, the Company acquired Top Spin which indirectly holds Care U, a Hong Kong-based provider of nursing solution
services. As part of the acquisition, the Company received a two-year profit guarantee from the vendor, entitling the Company to a refund
each of the two years if Care U’s net income for the year ending June 30, 2026 and 2027, falls below an agreed target.

The
contingent consideration asset recognized at a fair value of HKD1,680,000 (US$215,385) on the acquisition date is measured on a
recurring basis using significant unobservable (Level 3) inputs. It was determined using a discounted cash flow model with a 5.25%
discount rate and probability-weighted estimates of profit shortfalls.

The
reconciliation from the opening balances to the closing balances for recurring fair value measurements of the fair value hierarchy for
the year ended December 31, 2023, the six months ended June 30, 2024 and the year ended June 30, 2025 are as follows:

                                                                          Fair Value  
  Financial asset – contingent consideration asset                        HKD         
  Balance as of January 1, 2023, December 31, 2023 and