Company: CHOW
Filing Date: 2025-04-01
Form Type: F-1
Source: 0001641172-25-001938
Chunk: 194

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-04-01
Form: F-1
Chunk 194
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 of ASC 606 states:

“An entity should assess whether two or more promises in a contract are so highly interrelated and interdependent that they cannot be separated.”

Additionally, BC33(a) and (b) explain that if an entity provides a significant service of integrating multiple items into a combined output, those items are not distinct, as they serve as inputs to a unified deliverable rather than separate obligations.

Based on this guidance, the Company has determined that IT professional services are not distinct from hardware, software, or IT application licenses in certain contracts because they are necessary inputs to delivering a fully integrated IT solution rather than stand-alone deliverables.

| F-13 |

Contract Scenarios and Distinctness Evaluation

1. Sale of Hardware Products with IT Professional Services (e.g., Setup, Development, Customization, or Integration Services)

Nature of Promises & Intended Benefit to the Customer

In contracts where the Company sells hardware products, the hardware provides computing capability to the customer. However, the hardware alone does not deliver its full intended benefit without installation, configuration, and integration services. IT professional services ensure that the hardware is properly installed, tested, and integrated within the customer’s existing IT infrastructure, making it functional.

Assessment of Interdependency and Significant Effect on Utility

The Company has determined that hardware and IT professional services are not separately identifiable because:

| ● | The                                                                                         
 hardware requires IT services to be installed and configured before it can be used.         |
| ● | The                                                                                         
 IT professional services significantly modify and enhance the hardware, making them highly  
 interdependent.                                                                             |
| ● | Per                                                                                         
 BC33(a), IT professional services are an input to a combined output, rather than a separate 
 deliverable.                                                                                |

Why IT Professional Services Are an Input to the Combined Output

The Company considered the following factors in concluding that IT professional services are an input to a combined output:

| ● | Level                                                                                           
 of Integration: IT professional services ensure that the hardware is installed and operational  
 within the customer’s environment.                                                              |
| ● | Modification                                                                                    
 & Customization: The services configure the hardware to align with the customer’s               
 operational needs.                                                                              |
| ● | Customer                                                                                        
 Dependency: The customer does not receive a functional hardware system without the accompanying 
 installation and integration services.                                                          |

Revenue Recognition Conclusion

Since the hardware and IT professional services are highly interdependent and form a single performance obligation, revenue is recognized at a point in time when the fully integrated system is transferred to the customer, typically upon completion