Company: ZCARW
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110391
Chunk: 23

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 23
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 lease term. Operating lease ROU assets are recognized at commencement date in an amount equal to lease liability, adjusted for
any lease prepayments, initial direct costs, and lease incentives. For leases in which the rate implicit in the lease is not readily determinable,
the Company uses its incremental borrowing rate based on the information available at commencement date. Lease terms includes the effects
of options to extend or terminate the lease when it is reasonably certain at commencement of the lease that the Company will exercise
that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term reflecting single
operating lease cost. The Company evaluates lease agreements to determine lease and non- lease components, which are accounted for separately.

Lease payments that depend on factors
other than an index or rate are considered variable lease payments and are excluded from the operating lease assets and liabilities and
are recognized as expense in the period in which the obligation is incurred. The Company accounts for lease-related concessions in accordance
with guidance in Topic 842, Leases, to determine, on a lease-by-lease basis, whether the concession provided by lessor should be accounted
for as a lease modification.

The Company accounts for a modification
as a separate contract when it grants an additional right of use not included in the original lease and the increase is commensurate
with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. Modifications which
are not accounted for as a separate contract are reassessed as of the effective date of the modification based on its modified terms
and conditions and the facts and circumstances as of that date. Upon modification, the Company remeasures the lease liability to reflect
changes to the remaining lease payments and discount rates and recognizes the amount of the remeasurement of the lease liability as an
adjustment to the ROU assets. However, if the carrying amount of the ROU assets is reduced to zero as a result of modification, any remaining
amount of the remeasurement is recognized as an expense in condensed consolidated statements of income.

The Company reviews ROU assets
for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable.

15

ZOOMCAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

2.Summary
of Significant Accounting Policies (Continued)

xvii.Expenses

Cost
of revenue

Cost
of revenue expenses primarily consist of personnel-related