Company: FSTWF
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-044386
Chunk: 173

Company: FST Corp.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 16
Chunk 173
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 accounts payable, borrowings, amounts due to
related parties, accrued expenses and other current liabilities. The carrying
amounts of the Group’s financial instruments, including cash and cash equivalents, restricted cash, accountsand notes receivable,
amounts due from related parties, prepaid expenses and other current assets, accounts payable, short-term borrowings, amounts due
to related parties, accrued expenses and other current liabilities, approximate
their fair values because of their short-term nature. The carrying value of long-term borrowings approximate their fair values, because
the bearing interest rate approximates market interest rate.

F-12

FST Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In U. S. dollars, except for share and per
share data, or otherwise noted)

2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

(q) Revenue recognition

The Group recognized its revenue under ASC Topic 606,
Revenue from Contracts with Customers (“ASC 606”).
The core principle underlying the revenue recognition of ASC606 allows the Group to recognize revenue that represents the transfer of
goods and services to customers in an amount that reflects the consideration to which the Group expects to be entitled in such exchange.
This will require the Group to identify contractual performance obligations and determine whether revenue should be recognized at a point
in time or over time, based on when control of goods and services transfers to a customer.

To achieve that core principle, the Group applies
five-step model to recognize revenue from customer contracts. The five-step model requires the Group to (i) identify the contract
with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including
variable consideration to the extent that it is probable that a significant future reversal will not occur; (iv) allocate the transaction
price to the respective performance obligations in the contract; and (v) recognize revenue when (or as) the Group satisfies the performance
obligation.

The Group derives its revenues principally from
sales of golf shafts, sales of sports accessories, food and beverage and software service. The contract payment is not subject to any
variable consideration, refund, cancellation or termination provision. No significant financing component, noncash payment identified
in the arrangements with customers.

Revenue recognition policies for each type of
revenue stream are as follows:

Sales of golf shafts

The Group manufactures golf shafts and sells them
to sports brand manufacturers and distributors. The revenue is recognized at a point in time