Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 158

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 158
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 based upon the Company's
efforts to satisfy the performance obligation.

Standalone Selling Price Estimate

The company allocated the
contract price to both the software products and the service elements. The Company do not sell its installation service, post-contract
consulting and training service, technical support service and upgrade service separately from its software license contract, so the
price is not readily available. However there are independent 3rd party engineers who provide similar services in the open market and
the service prices are readily available in the market. The company applies adjusted market assessment approach to estimate the standalone
selling price for each service. The price for software product is the total selling price deducted by the allocated amount to installation
service, post-contract consulting and training service, technical support service and software upgrade service. There is no variable
consideration for the contract price. Revenue derived from PCS service, technical support
service and upgrade service are not material.

Principal and Agent Considerations

GAAP requires us to evaluate,
using a control model, whether the Company itself promises to provide services to the customers (as a principal) or to arrange for services
to be provided by another party (as an agent). The company controls the software and the service before it transfers to the customer.
The company is a principal as it is primarily responsible for fulfilling the promise to provide the specified software and services.
Based on the Company’s evaluation using a control model, the Company determined that in all of its major business activities, it
serves as a principal rather than an agent within their revenue arrangements.

Contract costs

Contract costs include contract
acquisition costs and contract fulfillment costs which are all recorded within prepayments, deposits, and other assets in the consolidated
balance sheets.

Contract acquisition costs
consist of incremental costs incurred by the Company to originate contracts with customers. Contract acquisition costs, which generally
include costs that are only incurred as a result of obtaining a contract, are capitalized when the incremental costs are expected to
be recovered over the contract period. All other costs incurred regardless of obtaining a contract are expensed as incurred. Contract
acquisition costs are amortized over the period the costs are expected to contribute directly or indirectly to future cash flows, which
is generally over the contract term, on a basis consistent with the transfer of goods or services to the customer to which the costs
relate. Contract fulfillments costs consist of costs incurred by the Company to fulfill a contract with a customer and are capitalized
when the costs generate or enhance resources that will be