Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 246

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 19
Chunk 246
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 Group’s incremental borrowing rate based on the information
available at the lease commencement date. The Group generally uses the base, non-cancellable lease term in calculating the right-of-use
assets and lease liabilities.

The Group may recognize the
lease payments in the consolidated statements of income/(loss) on a straight-line basis over the lease terms and variable lease payments
in the periods in which the obligations for those payments are incurred, if any. The lease payments under the lease arrangements are fixed.

The Group elected the practical
expedients for an entity ongoing accounting and applied the short-term lease exception for lease arrangements with a lease term of 12
months or less at commencement. Lease terms used to compute the present value of lease payments do not include any option to extend, renew
or terminate the lease that the Group is not able to reasonably certain to exercise upon the lease inception. Accordingly, operating lease
right-of-use assets and liabilities do not include leases with a lease term of 12 months or less.

The Group did not adopt the
practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Non-lease
components include payments for building management, utilities and property tax. It separates the non-lease components from the lease
components to which they relate.

Operating lease expense is
recognized on a straight-line basis over the lease term. For the years ended June 30, 2025, 2024 and 2023, the Group’s operating
lease expense was HKD1,120,629(US$142,757), HKD1,156,024and HKD1,177,995, respectively.

The Group evaluates the impairment
of its ROU assets consistent with the approach applied for its other long-lived assets. The Group reviews the recoverability of its long-lived
assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment
of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax
cash flows of the related operations. The Group has elected to include the carrying amount of operating lease liabilities in any tested
asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the years ended June 30, 2025,
2024 and 2023, the Group did not have any impairment loss against its operating lease ROU assets.

F-