Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 2429

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 7A
Chunk 2429
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 areas, or by changes in the demand for renewable energy.

Property and Equipment

Property and equipment are
stated at cost less accumulated depreciation, amortization, and impairment. The cost of an asset comprises its purchase price and any
directly attributable costs of bringing the asset to its present working condition and location for its intended use. Depreciation is
computed on a straight-line basis over the estimated useful lives. The useful lives per asset class are as follows:

    ● Solar Energy Facilities carry a useful life of the lesser of 35 years from the original placed in-service date or the lease term of the land on which they are built. 

    ●
    Leasehold improvements are amortized over the shorter of the lease term or their estimated useful life.

    ● Furniture and fixtures carry a useful life of 3 years. 

    ● Software and computer equipment carry a useful life of 3 and 5 years respectively. 

Expenditures for major renewals
and betterments which substantially extend the useful life of assets are capitalized. Expenditures for maintenance and repairs, which
do not materially extend the useful lives of assets, are charged to expense as incurred. Upon retirement, sale, or other disposition of
equipment, the cost and accumulated depreciation are removed from the respective accounts and a gain or loss, if any, is recognized on
the Consolidated Statements of Operations and Comprehensive Income/(Loss) during the year of disposal. When the Company abandons the anticipated
construction of a new solar energy facility during the development phase, costs previously capitalized on the Consolidated Balance Sheet
are written off to the Consolidated Statements of Operations and Comprehensive Income/(Loss) at the parent company.

F-13

Capitalized Development Costs

Capitalized development costs
relate to various projects that are under development for the period. As management determines to proceed with the development of a new
solar park or purchase an existing construction project of a solar park, costs toward the final value of that project are recorded in
Capitalized Development Costs on the Consolidated Balance Sheet. Costs can include, but are not limited to, financial, technical, and
legal due diligence costs.

As the Company closes either
the purchase or development of new solar parks and begins construction, the balance of these costs is reclassified to Construction in
Process on the Consolidated Balance sheet. Once construction is complete and all costs have been incurred, the final asset balance is
displayed in Property and Equipment. If the Company does not close