Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 896

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 1C
Chunk 896
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 subsidiaries
is typically the applicable local currency which is the Romanian Lei (RON), the Polish Zloty (PLN), or the European Union Euro (EUR).
Transactions denominated in foreign currencies are remeasured to the functional currency using the exchange rate prevailing at the balance
sheet date for balance sheet accounts and using an average exchange rate during the period, which approximates the daily exchange rate,
for income statement accounts. Foreign currency gains or losses resulting from such remeasurement are included in the Consolidated Statement
of Operations and Comprehensive Income/(Loss) in the period in which they arise.

Transaction gains and losses
are recognized in the Company’s Consolidated Statement of Operations and Comprehensive Income/(Loss) based on the difference between
the foreign exchange rates on the transaction date and on the reporting date. The Company had an immaterial net foreign exchange loss
for the year ended December 31, 2024 and 2023.

The translation from functional
foreign currency to United States Dollars (USD) is performed for asset and liability accounts using current exchange rates in effect at
the balance sheet date and using an average exchange rate during the period, which approximates the daily exchange rate, for income statement
accounts. The effects of translating financial statements from functional currency to reporting currency are recorded in other comprehensive
income. For the years ended December 31, 2024 and 2023, the increase/(decrease) in comprehensive loss related to foreign currency translation
gains was ($1.7) million and $0.7 million, respectively.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued
Accounting Standards Update (ASU) No. 2016-13, Financial Instruments-Credit losses (Topic 326), subsequently amended by ASU 2020-2. This
new guidance changes how entities account for credit impairment for trade and other receivables, as well as for certain financial assets
and other instruments held at amortized cost. The update replaces the previous current incurred loss model with an expected loss model.
Under the incurred loss model, a loss (or allowance) is recognized only when an event has occurred (such as a payment delinquency) that
causes the entity to believe that a loss is probable (that is has been “incurred”). Under the expected loss model, a loss
(or allowance) is recognized upon initial recognition of the asset that reflects all future events that may lead to a loss being realized,
regardless of whether it