Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 1195

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 6
Chunk 1195
---
     
    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
represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination.
Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying
amount of goodwill may be impaired. In conducting its annual impairment test, the Company first
reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its
carrying amount. If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs
a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash
flows. If the carrying value of the reporting unit continues to exceed its fair value, the fair value of the reporting unit’s goodwill
is calculated and an impairment loss equal to the excess is recorded.

    F-12

NETSOL
TECHNOLOGIES, INC.

Notes
to Consolidated Financial Statements

June
30, 2025 and 2024

Fair
Value of Financial Instruments

The
Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value
and establishes a three-level valuation hierarchy for disclosures