Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 661

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 1B
Chunk 661
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 and other current assets, accounts payable, accrued liabilities, and other current liabilities,
the carrying value approximated their fair values due to the short-term maturity of these instruments. The Company’s forward purchase
agreement asset is considered a Level 3 financial instrument at fair value and is described below in Footnote 5.

F-17

Business Combinations and Acquisition of Assets

The Company applies the definition
of a business in ASC 805, Business Combinations, to determine whether it is acquiring a business or a group of assets. When the
Company acquires a business, the purchase price is allocated to; (i) the acquired tangible assets and liabilities assumed, primarily consisting
of solar energy facilities and land, (ii) the identified intangible assets and liabilities, primarily consisting of intellectual property
(“IP”), favorable and unfavorable rate Power Purchase Agreements (PPAs), Renewable Energy Credit (REC) agreements, and favorable
or below-market exclusive consulting agreements (iii) asset retirement obligations, (iv) non-controlling interest, and (v) other working
capital items based in each case on their estimated fair values. The excess of the purchase price, if any, over the estimated fair value
of net assets acquired is recorded as goodwill. The fair value measurements of the assets acquired, and liabilities assumed were derived
utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs include, but are not
limited to, estimates of future power generation, commodity prices, operating costs, and appropriate discount rates. These inputs required
significant judgments and estimates at the time of the valuation. In addition, acquisition costs related to business combinations are
expensed as incurred.

When an acquired group of
assets does not constitute a business, the transaction is accounted for as an asset acquisition. The cost of assets acquired and liabilities
assumed in asset acquisitions is allocated based upon relative fair value. The fair value measurements of the solar facilities acquired
and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable
in the market. These inputs include, but are not limited to, estimates of future power generation, commodity prices, operating costs,
and appropriate discount rates. These inputs require significant judgments and estimates at the time of the valuation. Transaction costs,
including legal and financing fees directly related to the acquisition incurred, are capitalized as a component of the assets acquired.

The allocation of the purchase
price directly affects the following items in the Company’s consolidated