Company: WCT
Filing Date: 2025-05-16
Form Type: 20-F
Source: 0001213900-25-044576
Chunk: 125

Company: Wellchange Holdings Co Ltd
Filing Date: 2025-05-16
Form: 20-F
Item: Item 19
Chunk 125
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 this ASU
on its financial statements.

Management does not believe that any other recently
issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying consolidated financial
statements.

Cash and cash equivalents

Cash and cash equivalents represent cash at bank
and are unrestricted as to withdrawal or use. The Group does not have any cash equivalents as of December 31, 2023 and 2024. The
Group maintains bank accounts in Hong Kong. The Company believes that it is not exposed to any significant credit risk on cash
and cash equivalents.

F-10

WELLCHANGE HOLDINGS COMPANY LIMITED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
AND PRACTICES(cont.)

Accounts receivable, net

Accounts receivable mainly represent amounts due from customers for
provision of customized software solutions and cloud-based SaaS services from subscription which are recorded net of allowance for the
Company’s expected credit losses. The Company generally grant credit terms of90 daysto the clients. In evaluating the collectability
of receivable balances, the Company considers specific evidence including aging of the receivable, the client’s payment history,
its current creditworthiness, current economic trends and future expectations and customer specific quantitative and qualitative factors
that may affect our customers’ ability to pay. The Company regularly reviews the adequacy and appropriateness of the allowance for
expected credit losses. Accounts receivable are written off after all collection efforts have ceased. As of December 31, 2023 and
2024, allowance for expected credit losses was US$13,864and US$326,813, respectively.

Deposits, prepayments and other receivables,
net

Deposits, prepayments and other receivables consist
of utility and rental deposits paid and cash prepaid to suppliers for computer maintenance service. Deposits paid and cash prepaid to
suppliers are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured
and reviewed periodically to determine whether their carrying value has become impaired. As of December 31, 2023 and 2024, management
believes that the Company’s rental deposit is not impaired.

Property and equipment, net

Property and equipment are stated at cost less
accumulated depreciation and any impairment losses. Major renewals, betterments, and improvements are capitalized to the asset accounts
while replacements, maintenance, and repairs, which do not improve or extend the lives of the respective assets,