Company: CRAC
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-111020
Chunk: 9

Company: Crown Reserve Acquisition Corp. I
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 9
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 Initial Public Offering. Financial Accounting Standards Board (“FASB”) ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Class A ordinary shares and rights, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the rights and then to the Class A ordinary shares. Offering costs allocated to the Class A ordinary shares subject to possible redemption will be charged to temporary equity, and offering costs allocated to the rights associated with the public offering and the units associated with the private placement will be charged to shareholder’s equity as the rights included in the units, after management’s evaluation, will be accounted for under equity treatment. Should the Initial Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. 8  CROWN RESERVE ACQUISITION CORP. I NOTES TO CONDENSED FINANCIAL STATEMENTS Note 2 — Summary of Significant Accounting Policies (cont.) Concentration of Credit Risk  Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At June 30, 2025, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.  Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to their short term nature. Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:     ● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;      ●