Company: JWEL
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001213900-25-041556
Chunk: 144

Company: Jowell Global Ltd.
Filing Date: 2025-05-09
Form: 20-F
Item: Item 19
Chunk 144
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 January 1, 2020, the Company
adopted Accounting Standards Update (“ ASU”) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01,
collectively “ ASC 842”). For all leases that were entered into prior to the effective date of ASC 842, the Company has elected
to utilize the package of practical expedients at the time of adoption, which allows the Company to (1) not reassess whether any expired
or existing contracts are or contain leases, (2) not reassess the lease classification of any expired or existing leases, and (3) not
reassess initial direct costs for any existing leases. The Company also has elected to utilize the short-term lease recognition exemption
and, for those leases that qualified, the Company did not recognize operating lease right-of-use (“ ROU”) assets or operating
lease liabilities. The Company elected not to record assets and liabilities on its consolidated balance sheet for new or existing lease
arrangements with terms of 12 months or less.

Operating lease ROU assets
and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at
commencement date, adjusted by the deferred rent liabilities at the adoption date. As most of the Company’s leases do not provide
an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining
the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives
and initial direct costs incurred. The Company’s terms may include options to extend or terminate the lease when it is reasonably
certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term.
See Note 14 for further discussion.

The Company, through its
subsidiary, leases its offices, which are classified as operating leases in accordance with Topic 842. Operating leases are required to
record in the balance sheet as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments.
The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing
contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption