Company: EZOO
Filing Date: 2025-05-15
Form Type: 10-K
Source: 0001641172-25-010460
Chunk: 750

Company: Ezagoo Ltd
Filing Date: 2025-05-15
Form: 10-K
Item: Item 2
Chunk 750
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 at inception. This determination as to whether an arrangement contains a lease is based on an assessment as
to whether a contract conveys the right to the Company to control the use of identified property, plant or equipment for period of time
in exchange for consideration. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes
these lease expenses on a straight-line basis over the lease term.

The
Company has assessed its contracts and concluded that its leases consist of only operating leases. Operating leases are included in operating
lease right-of-use (ROU) assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s
consolidated balance sheets.

ROU
assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s
obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date
based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate,
the Company determines an incremental borrowing rate based on the information available at commencement date in determining the present
value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its
credit rating would be. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense
for lease payments is recognized on a straight-line basis over the lease term.

● Revenue recognition 

The
Company assesses and follows the guidance of ASC 606, revenue from contracts with customers is recognized using the following five steps:

    1.
    Identify
    the contract(s) with a customer;

    a.
    
    The
    parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices)
    and are committed to perform their respective obligations.

    b.
    
    The
    entity can identify each party’s rights regarding the services to be transferred.

    c.
    
    The
    entity can identify the payment terms for the services to be transferred.

    d.
    
    The
    contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change
    as a result of the contract).

    e.
    
    It
    is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the