Company: AGCC
Filing Date: 2025-07-29
Form Type: F-1/A
Source: 0001213900-25-068743
Chunk: 208

Company: Agencia Comercial Spirits Ltd.
Filing Date: 2025-07-29
Form: F-1/A
Chunk 208
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 to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its arrangements: •Identify the contract with a customer, •Identify the performance obligations in the contract, •Determine the transaction price, •Allocate the transaction price to performance obligations in the contract, and •Recognize revenue as performance obligation is satisfied. Under ASC 606, the Company estimates the transaction price, including variable consideration, at the commencement of the contract and recognizes revenue at the point of time as a principal when control of the goods is transferred to the customer, rather than when fees become fixed or determinable. The Company evaluates whether it acts as a principal or an agent based on the following criteria: •Control: The Company must have the primary responsibility for fulfilling the contracts, which includes managing inventory, determining pricing, and delivering the product. •Inventory Risk: The Company assumes inventory risk, meaning it may bear the risk of loss for the goods held in inventory before they are transferred to the customer. •Customer Relationship: The Company maintains the customer relationship and is responsible for providing customer service and support. •Profit Margin: The Company earns a profit margin that reflects the risks and rewards associated with being the principal. The Company will regularly assess its contracts with customers to determine the appropriate treatment for revenue under ASC 606. Cost of revenue The cost of revenue consists primarily of procurement of whisky products held for sale, as well as direct costs associated with the procurement, such as import and export charges, and processing charges. General and administrative expenses General and administrative expenses consist primarily of staff costs (including salaries, messing, etc.), expenses related to trademark, rental expenses, as well as professional fees incurred in daily operations. Sales and distribution expenses Sales and distribution expenses consist primarily of basic salaries and employee benefits of sales personnel not directly attributable to the generation of revenue and expenses incurred to various warehouses. Leases The Company adopted ASC 842, Leasesupon incorporation, using the modified retrospective transition method through a cumulative -effectadjustment in the period of adoption rather than retrospectively adjusting prior periods and the package of practical expedient. The Company categorized leases with contractual terms longer than twelve months as either operating or finance lease. F-11 AGENCIA COMERCIAL SPIRITS LTD NOTES TO THE COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED DECEMBER 31, 2023 AND 2024 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) ROU assets represent the Company