Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 607

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 607
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 such, an entity will perform its annual, or interim, goodwill
impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment
charge for the amount by which the reporting unit’s carrying amount exceeds its fair value. If fair value exceeds the carrying
amount, no impairment should be recorded. Any loss recognized should not exceed the total amount of goodwill allocated to that reporting
unit. Impairment losses on goodwill cannot be reversed once recognized.

When
measuring a goodwill impairment loss, an entity should consider the income tax effects from any tax deductible goodwill on the carrying
amount of the reporting unit. The ASU contains an illustration of the simultaneous equations method to demonstrate this, which reflects
a deferred tax benefit from reducing the carrying amount of tax-deductible goodwill relative to the tax basis.

An
entity may still perform the optional qualitative assessment for a reporting unit to determine if it is more likely than not that goodwill
is impaired. However, this ASU eliminates the requirement to perform a qualitative assessment for any reporting unit with zero or negative
carrying amount. Therefore, the same one-step impairment assessment will apply to all reporting units.

For
the year ended September 30, 2024, the management evaluated the recoverability of goodwill by performing qualitative assessment on
the reporting unit, Kun Pin Hui (Shandong), and determine that it is more likely than not that the fair value of Kun Pin Hui
(Shandong) is less than its carrying amount. Therefore, the management performed quantitative assessment, fully impairment loss on
goodwill of $8,636 was recognized for the year ended September 30, 2024, as the carrying amount of each reporting unit is in excess
of its fair value for the year ended September 30, 2024. The Company did not have any goodwill as of September 30,
2024.

Impairment
of Long-lived Assets

Long-lived
assets, including buildings and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances
(such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying
value of an asset may not be recoverable. We assess the recoverability of the assets based on the undiscounted future cash flows the
assets are expected to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from
the use of the asset plus net proceeds expected from disposition