Company: KPEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010699
Chunk: 30

Company: Kun Peng International Ltd.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 30
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 to measure a tax position that
meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position
is measured at the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Tax positions
that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which
the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized
in the first subsequent financial reporting period in which the threshold is no longer met.

Commitments and Contingencies

The Company follows the ASC 450-20,
“Contingencies” to report accounting for contingencies. Certain conditions may exist as of the date the financial statements
are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to
occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing
loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings,
the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount
of relief sought or expected to be sought therein.

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If the assessment of a contingency
indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potentially
material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered
remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not
believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial
position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect
the Company’s business, financial position, and results of operations or cash flows.

Recent Accounting Pronouncements

In March 2024, the FASB issued
ASU 2024-01,