Company: EJH
Filing Date: 2025-10-30
Form Type: 20-F
Source: 0001213900-25-104179
Chunk: 190

Company: E-Home Household Service Holdings Ltd
Filing Date: 2025-10-30
Form: 20-F
Item: Item 19
Chunk 190
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 lease, the
Group assess whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic
benefits from the use of the asset and whether it has the right to control the use of the asset.

The right-of-use assets and related lease liabilities
are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease
term.

F-12

Right-of-use of assets

The Company recognises right-of-use assets at
the commencement date of the lease (i. e. the date the underlying asset is available for use). Right-of-use assets are measured at cost,
less any accumulated depreciation and impairment losses and adjusted for any remeasurement 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.

Convertible note - cash conversion feature

ASC 470, Debt, requires the liability and equity
components of convertible debt instruments that may be settled in cash upon conversion to be separately accounted for in a manner that
reflects the issuer’s nonconvertible debt borrowing rate. ASC 470-20 requires that the initial proceeds from the sale of these notes
be allocated between a liability component and an equity component in a manner that reflects