Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 1815

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 9B
Chunk 1815
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 the customers
are billed under the terms of their contract, the corresponding amount is transferred from this account to “Accounts Receivable.”
The Company recognizes the potential risk associated with recognizing revenues in excess of billings, including the risk of non-payment
by the customer. Therefore, management continually assesses the collectability of such amounts and makes appropriate provisions or adjustments
if collectability becomes doubtful.

Property
and Equipment

Property
and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals
and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated
depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation is computed
using various methods over the estimated useful lives of the assets, ranging from 3 three to twenty years. Following is the summary
of estimated useful lives of the assets:

SUMMARY
OF ESTIMATED USEFUL LIVES OF ASSETS

    Category
     
    Estimated
    Useful Life

    Computer
    equipment and software
     
    3
    to 5 Years
  
    Office
    furniture and equipment
     
    5
    to 10 Years
  
    Building
     
    20
    Years
  
    Autos
     
    5
    Years
  
    Assets
    under capital leases
     
    3
    to 10 Years
  
    Improvements
     
    5
    to 10 Years

The
Company capitalizes costs of materials, consultants, and payroll and payroll-related costs for employees incurred in developing internal-use
computer software. These costs are included with “Computer equipment and software.”

Impairment
of Long-Lived Assets

The
Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the
assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds
the fair value.

Research
and Development Costs

Research
and development expenses are comprised of salaries, benefits and overhead expenses of employees involved in software product enhancement
and development, cost of outside contractors engaged to perform quality assurance, software product enhancement and development (if any).
Development costs are expensed as incurred.

Goodwill

Goodwill
rep