Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 140

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 18
Chunk 140
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 CECL”) methodology requires that the full amount of expected credit losses for the lifetime of the financial instrument be recorded at the time it is originated or acquired, considering relevant historical experience, current conditions and reasonable and supportable macroeconomic forecasts that affect the collectability of financial assets, and adjusted for changes in expected lifetime credit losses subsequently, which may require earlier recognition of credit losses.

The Company estimated the expected credit losses for accounts receivable with similar risk characteristics on a pool basis. For each pool, the Company considers the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. Other key factors that influence the expected credit loss analysis include payment terms offered in the normal course of business to customers and industry-specificfactors that could impact the Company’s receivables. Additionally, macroeconomic factors are also considered.

Accounts receivable, net, as of March 31, 2024 and 2025 consisted of the following:

                                         March 31,                                   
                                         2024                       2025             
 ─────────────────────────────────────────────────────────────────────────────────────
  Accounts receivable                    $              12,084      $         9,938  
  Less: Allowance for credit losses                       ( 98                 ( 24  
  Accounts receivable, net               $              11,986      $         9,914  

F-10

Table of Contents

DESWELL INDUSTRIES, INC.

2. Summary of Significant Accounting Policies(cont.)

The movement of allowance for credit losses for the years ended March 31, 2023, 2024 and 2025 was as follows:

  Allowance for credit losses                         Year ended March 31,                                                     
                                                      2023                                 2024                2025            
 ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Balance at beginning of the year                    $                           268      $           39      $           98  
  (Reversal of) provision for credit losses, net                                ( 229                  76                ( 67  
  Written off                                                                       —                ( 17                 ( 7  
                                                      $                            39      $           98      $           24  

The provision and reversal of credit losses for the years were charged to other income, net in consolidated statements of comprehensive income.

Shipping and handling cost - Shipping and handling costs related to the delivery of finished goods are