Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 151

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 19
Chunk 151
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 financing. The Company does not derecognize the
transferred asset and accounts for proceeds received as borrowings for which the current portion is included in “ Other current
liabilities” and the non-current portion is included in “ Other non-current liabilities” in the consolidated balance
sheets.

Operating
leases as Lessor

The
Company leases certain plant space to third parties and classifies a lease as either a direct financing lease or an operating lease when
none of the criteria specified as (a) to (e) in the “ Financing lease and operating lease as Lessee” policy at lease commencement
is met.

For
operating leases, the Company recognized rental income over the non-cancellable lease term on a straight-line basis and is included in
revenue in the statement of profit and loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis on the rental
income. The Company does not have any sales-type or direct financing leases for the years ended December 31, 2022, 2023 and 2024.

The
Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company 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.

(m) Impairment of long-lived assets

The
Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of
an asset may no longer be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the
long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition.
If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment
loss, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows. No

(n) Fair value measurement

Accounting
guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction
between market participants