Company: MEGL
Filing Date: 2025-04-14
Form Type: 20-F
Source: 0001641172-25-004566
Chunk: 128

Company: Magic Empire Global Ltd
Filing Date: 2025-04-14
Form: 20-F
Item: Item 19
Chunk 128
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 of the asset (asset group) and their eventual disposition. If the sum
of the expected undiscounted cash flows is less than the carrying amount of the asset (asset group), the Group recognizes an impairment
loss based on the excess of the carrying amount of the asset (asset group) over their fair value. Fair value is generally determined
by discounting the cash flows expected to be generated by the asset (asset group), when the market prices are not readily available.
The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived
assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of
the cash flows of other assets and liabilities. For the years ended December 31, 2024, 2023 and 2022, no

MAGIC
EMPIRE GLOBAL LIMITEDNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

  SUMMARY                                     
  OF SIGNIFICANT ACCOUNTING POLICIES (cont.)  
 ──────────────────────────────────────────────

Long-term
investment

ASU
2016-01 (“ ASU 2016-01”), Recognition and Measurement of Financial Assets and Financial Liabilities amends certain aspects
of recognition, measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except
those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair
value through earnings, unless they qualify for a measurement alternative.

Equity
Investments with Readily Determinable Fair Values

Equity
investments with readily determinable fair values are measured and recorded at fair value using the market approach based on the quoted
prices in active markets at the reporting date.

Equity
investments without readily determinable fair values

After
the adoption of this new accounting standard, the Group elected to record equity investments without readily determinable fair values
and not accounted for under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring
basis, and report changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity
investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment
of the same issuer. Reasonable efforts shall be made to identify price changes that are known or that can reasonably be known.

Derivative
investment

ASC 815-