Company: RIVF
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001493152-25-018109
Chunk: 352

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 6
Chunk 352
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(expensed) using the individual-film-forecast-computation method. The Company incurred participation costs of $1,995,058 and $100,000
for the twelve months ended June 30, 2025 and 2024, respectively, which is included in general and administrative expense on the consolidated
statements of operations. Further, the Company had accrued participation cost expenses of $311,469 and $0 as of June 30, 2025 and 2024,
which are presented in accrued expenses in the consolidated balance sheets. The accrued participation costs are expected to
be paid during the upcoming operating cycle.

Investments
in Equity Securities 

The
Company accounts for its investments in equity securities without a readily determinable fair value at cost minus impairment in accordance
with ASC 321, Investments-Equity Securities. Further, the Company will continue to recognize its investments without a readily
determinable fair value at cost minus impairment until the investment does not qualify to be measured as such. To that extent, the Company
will re-assess at the end of each reporting period whether the investment still qualifies to be recognized at cost minus impairment.

In
addition to assessing whether the investments still qualify to be recognized at cost minus impairment, the Company will also make a qualitative
assessment at the end of each reporting period considering impairment indicators to evaluate whether the investment is impaired. If the
qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than its carrying value,
then the investment will be written down to fair value. During the twelve months ended June 30, 2025, the Company recognized a
$1.0 million impairment on its original $2.0 million investment, resulting in a carrying value of $1.0 million as of June 30, 2025. The
Company did not recognize any impairment for the twelve months ended June 30, 2024. 

General
and Administrative Expenses

The
Company’s general and administrative expenses primarily consist of participation costs, personnel and related costs, including
employee salaries, legal fees relating to corporate matters, accounting and audit related costs, insurance, corporate communications,
information technology and related expenses.

Income
Taxes

The
Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases