Company: SCAG
Filing Date: 2025-07-03
Form Type: 20-F
Source: 0001213900-25-061408
Chunk: 86

Company: Scage Future
Filing Date: 2025-07-03
Form: 20-F
Item: Item 5
Chunk 86
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 time the accounting estimate was made, and (b) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements: (1) provision for expected credit losses, (2) estimates for inventory write-down, (3) warranty reserve.
 
Provision of allowance for expected credit losses
 
On July 1, 2023, we adopted ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement on Credit Losses on Financial Instruments”, including certain subsequent amendments, transitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (collectively, including ASU 2016-13, “ASC 326”). ASC 326 introduces an approach based on expected losses to estimate the allowance for credit losses, which replaces the previous incurred loss impairment model. We use aging schedule method in the current expected credit loss model (“CECL model”) to estimate the expected credit losses. Our estimation of allowance for credit losses considers factors such as historical credit loss experience, age of receivable balances, current market conditions, reasonable and supportable forecasts of future economic conditions, in combination with assessing receivable collectability on an individual basis, and applying current situation adjustment. If business or economic conditions change, estimates and assumptions may be adjusted as deemed appropriate. Historically, actual required adjustments have not varied materially from estimated amounts. We conclude that there is no impact over the initial adoption of CECL model, which should be treated as cumulative-effect adjustment on accumulated deficits as of July 1, 2023. We recorded reversal of provision for expected credit losses of US$36,801, and provision of allowance for expected credit losses of US$0.3 million and US$38,943 for financial assets during the six months ended December 31, 2024, and the fiscal years ended June 30, 2024 and 2023, respectively.
 
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Estimates for inventory write-down
 
Inventories, primarily consisting of raw materials, work in progress and finished goods, are stated at the lower of cost or net realizable