Company: RMSGW
Filing Date: 2025-07-31
Form Type: 20-F
Source: 0001641172-25-021609
Chunk: 82

Company: Real Messenger Corp
Filing Date: 2025-07-31
Form: 20-F
Item: Item 5
Chunk 82
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) convertible promissory notes. Out of our significant accounting
policies, which are described in Note 2 - Summary of Significant Accounting Policies of our consolidated financial statements included
elsewhere in this Registration Statement, certain accounting policies are deemed “critical”, as they require management’s
highest degree of judgment, estimates and assumptions, including valuation allowance for deferred tax assets.

We
consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were
highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from
period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact
on our financial condition or results of operations. We believe the following accounting estimates involve the most significant judgments
used in the preparation of our financial statements.

Valuation
allowance for deferred tax assets

We
account for income taxes using the liability method in accordance with ASC 740, Income Taxes (“ ASC 740”). Under the asset
and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected
future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities.

Deferred
tax assets are recognized to the extent that it is probable that taxable income to be utilized with prior net operating loss carried
forwards. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability
is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly
to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws
of the relevant taxing authorities.

We
evaluate our valuation allowance requirements at end of each reporting period by reviewing all available evidence, both positive and
negative, and considering whether, based on the weight of that evidence, a valuation allowance is needed. When circumstances cause a
change in management’s judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance
is generally reflected in income from operations. The future realization of the tax benefit of an existing deductible temporary difference
ultimately depends on the existence of sufficient taxable income of the appropriate character