Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 1455

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 4
Chunk 1455
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Goodwill and Intangible
Assets

Goodwill is tested for impairment
at least annually in the fourth quarter of our fiscal year. We first perform a qualitative assessment of whether it is more likely than
not that a reporting unit’s fair value is less than its carrying amount, and, if so, we then quantitatively compare the fair value
of our reporting units to their carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not impaired.
If the carrying amount of a reporting unit exceeds its fair value, we then record an impairment loss equal to the difference, up to the
carrying value of goodwill. The carrying values of identifiable intangible assets are reviewed for recoverability on a quarterly basis.
The facts and circumstances considered include the recoverability of the cost of other intangible assets from future undiscounted cash
flows to be derived from the use of the asset or asset group. It is not possible for us to predict the likelihood of any possible future
impairments or, if such an impairment were to occur, the magnitude of any impairment. Intangible assets are subject to amortization over
the expected period of economic benefit to us. We evaluate whether events or circumstances have occurred that warrant a revision to the
remaining useful lives of intangible assets. In cases where a revision is deemed appropriate, the remaining carrying amounts of the intangible
assets are amortized over the revised remaining useful life.

Business Combinations

The allocation of the purchase
price for acquisitions requires use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible
and intangible assets acquired, including franchise agreements, agent relationships, existing real estate listings, and non-compete agreements
and liabilities assumed based on their respective fair values. The estimates we make include expected cash flows, expected cost savings,
and the appropriate weighted average cost of capital. We complete these assessments as soon as practical after the acquisition closing
dates. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill.

Stock-Based Compensation

We use the fair value method
of accounting for our stock options and restricted stock units (“RSUs”) granted to employees, contractors and consultants
to measure the cost of services received in exchange for the stock-based awards. The fair value of stock option awards with only service
conditions is estimated on the grant date using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires
inputs such as the risk-free interest rate