Company: RHNO
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001493152-25-022052
Chunk: 92

Company: RHINO BITCOIN INC.
Filing Date: 2025-11-13
Form: 10-K
Item: Item 1A
Chunk 92
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 method to account for investments it possesses the ability to exercise significant influence, but not control,
over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor
possesses more than 20% of the voting interests of the investee.

In
applying the equity method, the Company records the investment at cost and subsequently increase or decrease the carrying amount of the
investment by proportionate share of the net earnings or losses and other comprehensive income of the investee. The Company records dividends
or other equity distributions as reductions in the carrying value of the investment.

Measurement
of Credit Losses on Financial Instruments

The
Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred loss methodology
with an expected credit loss methodology known as the Current Expected Credit Loss (CECL) model. This new standard requires entities
to estimate credit losses over the life of a financial asset based on historical experience, current conditions, and reasonable forecasts.

The
adoption of the CECL model applies to the Company’s portfolio of trade receivables and other financial assets, and resulted in
changes to the methodology for determining the allowance for credit losses. Under the CECL model, the Company recognizes an allowance
for credit losses at the inception of a financial asset and adjusts it over the life of the asset based on updated expectations of credit
losses.

Income
taxes

The
provision of income taxes is determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”).
Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities
are measured using enacted income tax rates expected to apply to taxable income in the year in which those temporary differences are
expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income
in the year that includes the enactment date.

ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements
uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the
financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax
positions must initially and