Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 243

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 19
Chunk 243
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 receivable is recorded at the original invoice amount less
a provision for estimated credit losses.

On July 1, 2023, the Group adopted ASU 2016-13, Financial Instruments
 - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ ASC 326”). ASC 326 requires the
application of a credit loss model based prospectively on current expected credit losses (CECL), and replaces the previous model based
retrospectively on past incurred losses. The Group adopted ASC 326 using the modified retrospective method for all financial assets measured
at amortized cost. Results for reporting periods beginning July 1, 2023 are presented under ASC 326. The Group concludes that there is
no impact over the initial adoption of CECL model, which should be treated as cumulative-effect adjustment on retained earnings as of
June 30, 2023.

The Group estimated its provision
for credit losses using relevant available information from internal and external sources relating to past events including aging schedule
of receivables, migration rate of receivables, assessment of receivables due from specific identifiable counterparties that are considered
at risk or uncollectible, current conditions and reasonable and supportable forward-looking factors. During the year ended June 30, 2025
and 2024, the Group (revered)/accrued HKD(77,218) (US$(9,837)) and HKD101,598provision for credit losses on the consolidated financial
statement related to accounts receivable respectively. As of June 30, 2025 and 2024, the provision for credit losses was HKD43,402(US$5,529)
and HKD120,620(See Note 4).

Prepayment, deposits and other receivables

Prepayment include the expenses
paid in advance to service providers. Deposits consist of security payments made to local in-country partner for the employment services
provided and are refundable upon termination of services. Other receivables include remuneration/ Mandatory Provident Fund (“ MPF”)
payment to be collected from the Group’s customers.

On July 1, 2023, the Group
adopted ASC 326 using the modified retrospective method for other receivables recorded in prepayment, deposits and other receivables.
There is no impact over the initial adoption of CECL model.

The Group did not have provision
for credit losses against other receivables as of June