Company: RETO
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041195
Chunk: 55

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 19
Chunk 55
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 warranty costs and, therefore,
the Company does not believe an accrual for warranty cost is necessary for the years ended December 31, 2024, 2023 and 2022.

  Revenue from technological consulting and other services  

The Company recognizes revenue when technological
consulting and other services are rendered and accepted by the customers.

The following summarizes the Company’s revenue
by nature from continuing operations:

                                                   For the Year Ended December 31,                                                              
                                                   2024                                                2023                  2022               
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Machinery and equipment                          $                                    1,176,070      $         10,781      $         204,495  
  Technological consulting and other services                                             652,906                -                     -        
  Total revenue                                    $                                    1,828,976      $         10,781      $         204,495  

F-13

RETO ECO-SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Contract Assets and Liabilities

Payment terms are established in accordance with
the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contract assets are
included in accounts receivable. Contract liabilities are recognized for contracts for which payment has been received in advance of delivery.
The contract liability balance can vary significantly depending on the timing of when an order is placed and when shipment or delivery
occurs.

As of December 31, 2024 and 2023, other than accounts
receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs
recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery,
which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred.

Disaggregation of Revenues

The Company disaggregates its revenue from contracts
by products and services, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash
flows are affected by economic factors.

Shipping and Handling

Shipping and handling costs are expensed as incurred
and are included in operating expenses as a part of selling and general and administrative expenses in the Company’s consolidated
statements of income and