Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 396

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 396
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 reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements: (1) provision for expected credit losses, (2) estimates for inventory provisions, (3) valuation allowance for deferred tax assets, (4) warranty reserve and (5) impairment of long -livedassets. Provision of allowance for expected credit losses On July 1, 2023, we adopted ASU 2016 -13, “Financial Instruments—Credit Losses (Topic 326): Measurement on Credit Losses on Financial Instruments”, including certain subsequent amendments, transitional guidance and other interpretive guidance within ASU 2018 -19, ASU 2019 -04, ASU 2019 -05, ASU 2019 -11, ASU 2020 -02and ASU 2020 -03(collectively, including ASU 2016 -13, “ASC 326”). ASC 326 introduces an approach based on expected losses to estimate the allowance for credit losses, which replaces the previous incurred loss impairment model. We use aging schedule method in the current expected credit loss model (“CECL model”) to estimate the expected credit losses. Our estimation of allowance for credit losses considers factors such as historical credit loss experience, age of receivable balances, current market conditions, reasonable and supportable forecasts of future economic conditions, in combination with assessing receivable collectability on an individual basis, and applying current situation adjustment. If business or economic conditions change, estimates and assumptions may be adjusted as deemed appropriate. Historically, actual required adjustments have not varied materially from estimated amounts. We conclude that there is no impact over the initial adoption of CECL model, which should be treated as cumulative -effectadjustment on accumulated deficits as of July1, 2023. Provision of allowance for expected credit losses of US$0.3 million and US$38,943 for financial assets were recorded during the fiscal years ended June 30, 2024 and 2023, respectively. Estimates for inventory provisions Inventories, primarily consisting of raw materials, work in progress and finished goods, are stated at the lower of cost or net realizable value, with net realized value represented by estimated selling prices in the ordinary course of business, less reasonably predictable costs of disposal and transportation. Cost of inventory is determined using the weighted