Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 1548

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 4
Chunk 1548
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 limited to, estimates of future power generation, commodity prices, operating costs, and appropriate discount rates.
These inputs require significant judgments and estimates at the time of the valuation. Transaction costs incurred, including legal and
financing fees directly related to the acquisition, are capitalized as a component of the assets acquired.

66

The allocation of the purchase price directly
affects the following items in the Company consolidated financial statements:

    ●
    The amount of purchase price allocated to the various tangible and intangible assets, liabilities, and non-controlling interests on the Company balance sheet;

    ●
    The amounts allocated to current assets or current liabilities are allocated at the acquisition value. The amounts allocated to long term tangible and intangible assets are amortized to depreciation or amortization expense, and

    ●
    The period over which tangible and intangible assets and liabilities are depreciated or amortized varies. Changes in the amounts allocated to these assets and liabilities will have a direct impact on Company results of operations.

Measurement of Level 3 Liabilities

Financial liabilities where values are based on
valuation techniques that require inputs that are both unobservable and are significant to the overall fair value measurement are classified
as Level 3 under the fair value hierarchy established in applicable accounting standards. The fair value of these Level 3 financial liabilities
is determined by using a third-party pricing service using Monte Carlo simulations or similar techniques for which the determination of
fair value requires significant management judgment or estimation. The Level 3 gains and losses are valued quarterly and recorded in earnings.

Impairment of Renewable Energy Facilities

Renewable energy facilities that are held and
used are reviewed for impairment whenever events or changes in circumstances indicate carrying values may not be recoverable. An impairment
loss is recognized if the total future estimated undiscounted cash flows expected from an asset are less than its carrying value. An impairment
charge is measured as the difference between an asset’s carrying amount and its fair value. Fair values are determined by a variety
of valuation methods, including appraisals, sales prices of similar assets, and present value techniques.

Quantitative and Qualitative Disclosures About
Market Risk

Market Risk

The Company has no derivative financial instruments
or derivative commodity instruments.

Foreign Currency Risk

The Company is exposed to foreign currency risk
as a result of certain transactions and borrowings which are denominated in foreign currencies.

In addition, the Company is exposed to currency
risk associated with translating its functional currency financial statements into its reporting currency, which is the U.S