Company: CHOW
Filing Date: 2025-02-28
Form Type: DRS/A
Source: 0001493152-25-008591
Chunk: 270

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-02-28
Form: DRS/A
Chunk 270
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ligations that have yet to be satisfied. Deferred revenue is recognized as revenue once the Company satisfies the performance obligations
under the contract, which typically involves the delivery of services, or the achievement of specific milestones outlined in the contract.

| F-63 |

As of December 31, 2023, the contract liabilities
balance was HK$18,585,792, and HK$18,561,713 out of the balance were recognized as revenue during the six months ended June 30, 2024.
As of June 30, 2024, contract liabilities totalled HK$4,277,005 (US$548,334). Of this balance, HK$4,263,721 (US$546,631) is expected
to be recognized as revenue during the year ending December 31, 2024, upon the satisfaction of the associated performance obligations.

The Company’s contract liabilities primarily
relate to advance billings for ongoing service contracts, including managed IT services, support and maintenance, and IT infrastructure
solutions, where payment is received before services are rendered. For these contracts, the Company recognizes revenue over time as performance
obligations are satisfied, typically based on either the passage of time or milestones achieved.

Deferred revenue is recognized as revenue when the
following criteria are met:

| 1. | Performance obligations                                                                                 
 are satisfied over time or upon the achievement of defined milestones.                                  |
| 2. | Revenue is recognized over                                                                              
 the contract term for service contracts, or at a point in time when a significant milestone is reached. |

The timing of revenue recognition depends on the
specific contract terms and may vary based on the type of service provided and the method of measuring progress, such as output methods
(e.g., deliverables completed).

Revenue to be Recognized in Future Periods

As of June 30, 2024, the Company expects to recognize
most of its contract liabilities as revenue during the year ending December 31, 2024, as performance obligations are fulfilled. However,
the actual timing of revenue recognition may be impacted by factors such as changes in customer requirements, delays in project execution,
or other uncertainties. The Company regularly assesses its contract liabilities and adjusts revenue recognition estimates as necessary.

6. PREPAYMENT AND OTHER CURRENT ASSETS, NET AND OTHER NON-CURRENT ASSETS, NET

Prepayment and other current assets, net consisted
of the following as of December 31, 2023 and June 30, 2024: