Company: XXC
Filing Date: 2025-11-18
Form Type: 20-F
Source: 0001213900-25-111691
Chunk: 82

Company: XINXU COPPER INDUSTRY TECHNOLOGY Ltd
Filing Date: 2025-11-18
Form: 20-F
Item: Item 19
Chunk 82
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 a combination of factors including current sales volume, market conditions, lower cost or market analysis and the expected
realizable value of the inventory.

F-9

XINXU COPPER INDUSTRY TECHNOLOGY LIMITED

NOTE 2 - SIGNIFICANT ACCOUNTING
POLICIES(cont.)

Advances to Suppliers

Advances to suppliers refer
to advances for purchase of materials or other service agreements, which are applied against accounts payable when the materials or services
are received.

The Company reviews a supplier’s
credit history and background information before advancing payment. If the financial condition of its suppliers were to deteriorate, resulting
in an impairment of their ability to deliver goods or provide services, the Company would write off such amount in the period when it
is considered impaired. For the fiscal years ended June 30, 2025, the Company had provision adjustment for advances to suppliers
in the amount of $307,463. For the fiscal year ended June 30, 2024 and 2023, the Company had provision reversal for advances to suppliers
in the amount of $180,009and$0, respectively.

Other Receivables

Other receivables mostly refer
to the interest income earned but not received from the loan receivable that Company had with the third-party borrower. The interest
receivable would be collected at the time the loan receivable was due from the third party.

Other Current Assets

Other current assets are related
to VAT input tax credit to be certified by the PRC tax authorities to be qualified for future deduction against VAT output tax liability.

Deferred Revenues

Deferred revenue refers to
a deferred government grant in relation to purchase of land use rights. This grant is amortized on a straight-line basis over a 50-year period
starting from April 2013.

Long-term Deferred Expenses

Long-term deferred expenses
refer to deferred repair and maintenance fees for buildings and manufacturing equipment.

Advances from Customers

Advances from customers refer
to advances received from customers regarding product sales, which are applied against revenue when performance obligations are satisfied.

Property and Equipment, net

Property and equipment are
recorded at cost less accumulated depreciation. Depreciation commences upon placing the asset in use and is recognized on a straight-line basis
over the estimated useful lives of the assets with5% of residual value, as follows:

                               Useful lives  
  Buildings                    20 years      
  Machinery and equipment      10 years      
  Transportation vehicles      5 – 10 years