Company: JL
Filing Date: 2025-07-28
Form Type: 20-F
Source: 0001213900-25-068049
Chunk: 200

Company: J-Long Group Ltd
Filing Date: 2025-07-28
Form: 20-F
Item: Item 18
Chunk 200
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,669                 9,129,165  
  Hong Kong                                                        12,536,891                 8,117,692                 9,718,300  
  China                                                             3,900,174                 2,770,967                 7,758,825  
  Non-Asia                                                          8,236,692                 5,008,341                12,468,800  
                                                                   38,292,397                28,378,669                39,075,090  

Cost of sales

Cost of products sold is
primarily comprised of finished goods and direct materials. Cost of products sold also includes the cost for products inspection, labor
cost, depreciation expenses of machinery and equipment and leasehold improvement, lease expense for warehouse, packing and design cost and sub-contractor fee.

F-17

J-LONG GROUP LIMITED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

Selling and marketing expenses

Selling expenses mainly
consist of commission paid, out-bound shipping cost, travel expenses, exhibition and promotion fees, share-based compensation and staff
costs.

General and administrative expenses

General and administrative
expenses mainly consist of administrative staff costs and directors’ remuneration, travel and transportation expenses, depreciation
of property, plant and equipment, CECL provision, inventory impairment provision, bank charges, professional fee, lease expenses, audit fee and other miscellaneous
administrative expenses.

Leases

The Company determines whether
an arrangement is or contain a lease at inception. A lease for which substantially all the benefits and risks incidental to ownership
remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating
leases. Operating leases are included in operating lease right-of-use (“ ROU”) assets, operating lease liability, current,
and operating lease liability, non- current in the Company’s consolidated balance sheets.

ROU assets represent the
Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments
arising from the lease. The operating lease ROU assets and lease liabilities are recognized at lease commencement date based on the present
value of lease payments over the lease term. 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 lease commencement date in determining the present value of lease
payments. The operating lease ROU assets also includes any lease payments made