Company: OSRH
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001213900-25-109054
Chunk: 18

Company: OSR Holdings, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 18
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 maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Group determines fair
value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market.
When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable
and unobservable inputs, which are categorized in one of the following levels:

–Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible
to the reporting entity at the measurement date.

–Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset
or liability, either directly or indirectly, for substantially the full term of the asset or liability.

–Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent
that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset
or liability at measurement date.

The carrying value of cash and cash
equivalents, trade and other receivables, inventories, prepaid expenses and other current and financial assets, trade and other payable,
short-term borrowing, current operating lease liabilities, and accrued expenses and other current liabilities approximates their fair
value due to the short-term nature of these instruments. The carrying amount reported in the condensed consolidated balance sheets for
notes payable to related party may differ from fair value since the interest rate is fixed.

p.Compound Financial Instruments

Compound financial instruments are convertible
bonds that can be converted into equity instruments at the option of the holder. The liability component of a compound financial instrument
is recognized initially at the fair value of a similar liability that does not have an equity conversion right and subsequently measured
at amortized cost until extinguished on conversion or maturity of the bonds. The equity component is recognized initially on the difference
between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable
transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

q.Accounting pronouncements adopted as of September 30, 2025

In October 2021,
the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts
with Customers, which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue
contracts acquired in a