Company: FSTWF
Filing Date: 2025-07-25
Form Type: 424B3
Source: 0001213900-25-067790
Chunk: 175

Company: FST Corp.
Filing Date: 2025-07-25
Form: 424B3
Chunk 175
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 for all contracts with lease terms of 12 months or less. The Group recognizes lease expense for short -termleases on a straight -linebasis over the lease term.

F-13 FST Corp. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In U.S. dollars, except for share and per share data, or otherwise noted) 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Right -of -useassets represent the Group’s right to use an underlying asset for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. Right -of -useassets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. If the interest rate implicit in the Group’s leases is not readily determinable, the Group utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right -of -useassets also include lease payments made before commencement and exclude lease incentives. Some of the Group’s lease agreements contained renewal options; however, the Group did not recognize right -of -useassets or lease liabilities for renewal periods unless it was determined that the Group was reasonably certain of renewing the lease at inception or when a triggering event occurred. Lease expense for lease payments is recognized on a straight -linebasis over the lease term. The Group leases factories, warehouses, offices space, vehicles and machineries under non -cancellableoperating leases. The Group considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. The Group determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. As of December 31, 2024 and 2023, the Group had no long -termleases that were classified as a financing lease, and the Group’s lease contracts only contain fixed lease payments and do not contain any residual value guarantee. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. (m)Borrowings Borrowings comprise long -termand short -termbank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized as interest expense in profit or loss over