Company: AVCRF
Filing Date: 2025-06-16
Form Type: 20-F
Source: 0001641172-25-015266
Chunk: 69

Company: Avricore Health Inc.
Filing Date: 2025-06-16
Form: 20-F
Item: Item 19
Chunk 69
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Leases
of the Company’s POCT systems to customers are classified as operating leases. Lease payments from operating leases are recognized
as income on a straight-line basis. All costs, including depreciation, incurred in earning the operating lease income are recognized
as cost of sales. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset
and recognized as an expense over the lease term on the same basis as the lease income. The depreciation for depreciable underlying assets
subject to operating leases is in accordance with depreciation policy for the Company’s equipment.

Avricore
Health Inc.

Notes
to the Consolidated Financial Statements

For
the years ended December 31, 2024, 2023 and 2022

(Expressed
in Canadian Dollars)

  SUMMARY                                      
  OF MATERIAL ACCOUNTING POLICIES (continued)  
 ───────────────────────────────────────────────

  Foreign   
  currency  
 ────────────

Foreign
currency transactions are translated into the functional currency of the respective entity, using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement
of monetary items at year-end exchange rates are recognized in profit or loss.

Non-monetary
items measured at historical cost are translated using the exchange rates at the date of the transaction and are not retranslated. Non-monetary
items measured at fair value are translated using the exchange rates at the date when fair value was determined.

The
results and financial position of consolidated entities that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:

  Shareholder’s                                                                              
  equity is translated at historical rates of exchange at the reporting date.                
 ─────────────────────────────────────────────────────────────────────────────────────────────
  Assets                                                                                     
  Income                                                                                     
  All                                                                                        

  Cash                  
  and cash equivalents  
 ────────────────────────

Cash
and cash equivalents include cash on account, demand deposits and money market investments with maturities from the date of acquisition
of three months or less, which are readily convertible to known amounts of cash and are subject to insignificant changes in value.

  Intangible  
  assets      
 ──────────────

All
intangible assets acquired separately by the Company are recorded at cost on the date of acquisition. Intangible assets that have indefinite
lives are measured at cost less accumulated impairment losses. Intangible assets