Company: XAIR
Filing Date: 2025-06-20
Form Type: 10-K
Source: 0001641172-25-015750
Chunk: 267

Company: Beyond Air, Inc.
Filing Date: 2025-06-20
Form: 10-K
Item: Item 15
Chunk 267
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 devices in accordance with Accounting Standards Codification 842, Leases (“ASC 842”). Under ASC 842,
leases may be classified as either financing, sales-type, or operating, and the Company is required to disclose key information about
leasing arrangements. The classification determines the pattern of revenue recognition and classification within the consolidated statements of operations
and comprehensive loss. The Company typically classifies the rental arrangement of its LungFit® PH contracts as operating leases.
The Company’s leases do not contain any restrictive covenants or any material residual value guarantees. The Company’s equipment
leases may contain renewal options which range from one month to two years. The lease term is adjusted for renewal or termination options
that the Company believe the customer is reasonably certain to exercise.

The Company elected the practical expedient applied
to operating leases not to separate lease and non-lease components as long as the lease and non-lease components have the same timing
and pattern of transfer. As such, the non-lease components, including the Consumables and Services, are combined with the predominant
lease component. The total fixed fees that the Company is reasonably certain to collect are recognized on a straight line basis over the
term of the arrangement. Additionally, the Company made an accounting policy election to present LungFit® PH revenue net of sales
and other similar taxes.

Amounts billed in advance of performance obligations
being satisfied are recognized as deferred revenue.

At the lease commencement date, the Company will defer
initial direct costs, including commission expense and the cost is recognized over the lease term on the same basis as lease income.

The Company records the costs of shipping related
to contract devices and consumables in cost of revenue in its consolidated statements of operations and comprehensive
loss.

See Note 16 to the consolidated financial statements
for more information regarding leasing arrangements.

Accounts Receivable

The Company extends credit
to its customers on an unsecured basis. Accounts receivable are recorded at the invoiced amount, based on agreed contract terms. Receivables
are written off when it is determined that amounts are uncollectible. There are currently no allowances for expected credit losses and
no doubtful debts recorded in accounts receivable and the Company has not experienced any credit losses to date.

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures
(“ASC 820”), defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in
the principal or most advantageous market in an orderly transaction between market participants on