Company: WKSP
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010837
Chunk: 7

Company: Worksport Ltd
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 7
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 were reclassified from
general and administrative expense, to research and development expense. This change improves the disclosure of costs to develop new
products and technologies and reflects the Company’s ongoing investment in innovation. The change also provides a more accurate
depiction of the Company’s operating performance.

Recent
accounting pronouncements

Recent
accounting pronouncements adopted

In
November 2023, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) 2023-07 “Segment Reporting
(Topic 280): Improvements to Reportable Segment Disclosures” which expands annual and interim disclosure requirements
for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for our
annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We adopted
this standard for the year ended December 31, 2024, and applied the amendments retrospectively to all prior periods presented. Refer
to Note 17, Segment Reporting. The adoption of this standard did not have a material effect on the financial statements and related disclosures.

Recent
accounting pronouncements not yet adopted

In
December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures”
to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09
is effective for our annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the
potential effect that the updated standard will have on the financial statements and related disclosures.

In
November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation
Disclosures” to enhance disclosure of specified categories of expenses (purchases of inventory, employee compensation, depreciation
and amortization) included in certain expense captions presented on the face of the income statement. ASU 2024-03 is effective beginning
after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.
The Company is currently evaluating the potential effect that the updated standard will have on the financial statements and related
disclosures.

The
company considers the applicability and impact of all ASUs. ASUs