Company: EJH
Filing Date: 2025-10-30
Form Type: 20-F
Source: 0001213900-25-104179
Chunk: 91

Company: E-Home Household Service Holdings Ltd
Filing Date: 2025-10-30
Form: 20-F
Item: Item 4A
Chunk 91
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 of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement
date, less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets. All right-of-use assets are reviewed for impairment annually. There was no impairment for
right-of-use lease assets for the years ended June 30, 2023, 2024, and 2025.

Lease liabilities

Lease liability is initially measured at the present
value of the outstanding lease payments at the commencement date, discounted using the Group’s incremental borrowing rate. Lease
payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an index
or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option that the Group
is reasonably certain to exercise. Lease liability is measured at amortized cost using the effective interest rate method. It is re-measured
when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual
value guarantee, or if there is any change in the Group assessment of option purchases, contract extensions or termination options.

Revenue Recognition

We recognize revenue in accordance with ASC Topic
606, Revenue from Contracts with Customers, pursuant which revenue is recognized when control of the promised goods or services is transferred
to the customer, in an amount that reflects the consideration we expect to receive in exchange for those goods or services.

We generate revenues primarily from appliance
installation & maintenance services, housekeeping services, senior care services, sales of pharmaceutical products, and educational
consulting services. The sales of pharmaceutical products business have been discontinued since November 2024, as we disposed of our subsidiary
Zhongrun.

We sell our goods and services through a third-party
service provider WeChat platform. Our revenues are subject to VAT. To record VAT payable, we use the gross presentation method, which
presents the taxable services and the available input VAT amount (at the rate applicable to the supplier). Revenues are recorded net of
VAT in accordance with the ASC 606. We consider revenue realized or realizable and earned when all the five following criteria are met:
(1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3