Company: BIAF
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001840
Chunk: 690

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 6
Chunk 690
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 and implicit price concessions, recording adjustments in the current period as changes in estimates. The process for estimating
revenues and the ultimate collection of accounts receivable involves significant judgment and estimation.

 60 

Patient
Fee Receivables and Considerations for Credit Losses

We
follow accounting considerations of CECL - Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on
Financial Instruments. With the acquisition of PPLS and control of Village Oaks, the Company’s board-certified pathologists
provide anatomic and clinical pathology services for patients and other customers. The Company’s other customer types include contract
research organizations (“CRO’s), hospitals, and independent laboratories. The majority of the Company’s revenues stem
from fees for services provided to patients, and thus, in those arrangements, the patient is the customer, although the services may
be requested by a physician on the patient’s behalf. Furthermore, in addition to its contracts with patients, the Company separately
contracts with third-party payors (insurance companies and governmental payors), who are typically responsible for all or the majority
of the fees agreed upon for such services provided to patients. Historically, material amounts of gross charges are not collected due
to various agreements with insurance companies, capped pricing levels for government payors and uncollectible balances from individual
payers. To estimate these allowances of credit losses, the Company assesses the portfolio risk segments and historical data on collection
rates. These estimated allowances offset patient revenues and accounts receivables.

Discount
Rate for Finance Leased Equipment

We
follow Leases (“ASC 842”). In February 2016, the FASB issued Topic ASC 842, under which a lessee is required to recognize
most leases on its balance sheet. The Company has elected to apply a third-party valuation incremental borrowing rate (“IBR”)
as the discount rate by class of underlying assets when the rate is not implicit in the lease.

Share-Based
Compensation

We
follow ASC 718, Compensation – Stock Compensation, which requires the measurement and recognition of compensation expense
for all share-based payment awards made to employees, directors, and non-employees based on estimated fair values. We have used the Black-Scholes
option pricing model to estimate grant date fair value for all option grants. The assumptions we use in calculating the fair value of
share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application
of management judgment. As such,