Company: OSRH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076461
Chunk: 12

Company: OSR Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 the reporting period. Actual results could differ from those estimates. Significant
items subject to such estimates and assumptions include allowance for credit losses, valuation of inventories, valuation of deferred
tax assets, the useful lives of equipment and vehicles, lease liabilities and right-of-use assets, and other contingencies.

d.Cash and cash equivalents

The Group considers all highly liquid
financial instruments with original maturities of three months or less when purchased to be cash equivalents.

e.Allowance for credit losses

The Group records an allowance for
credit losses (ACL) under Subtopic 326-20 Financial Instruments - Credit Losses – Measured at Amortized Cost for the current
expected credit losses inherent in its financial assets measured at amortized cost and contract assets. The ACL is a valuation account
deducted from the amortized cost basis to present the net amount expected to be collected. The estimate of expected credit losses includes
expected recoveries of amounts previously written off as well as amounts expected to be written off.

7

Accounts receivable

The Group uses an aging schedule to estimate
the ACL for trade accounts receivable. This method categorizes trade receivables into different groups based on industry and the number
of days past due. Past due status is measured based on the number of days since the payment due date. The trade receivables are evaluated
individually for expected credit losses if they no longer share similar risk characteristics. The Group determines that the receivables
no longer share similar risk characteristics if they are past due balances over 90 days and over a specified amount. The Group
evaluates the collectability of trade accounts receivables with payments that are more than 90 days past due on an individual basis to
determine if any are deemed uncollectible. Trade accounts receivable balances are deemed uncollectible and written off as a deduction
from the allowance after all means of collection have been exhausted.

f.Accounts receivable

Accounts receivables are recorded at
the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in cash flows from operating
activities in the condensed consolidated statements of cash flows.

g.Inventories

Inventories are stated at the lower
of cost or net realizable value and cost is determined by the first-in, first-out method. Cost comprises of direct materials and delivery
costs, direct labor, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal