Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 3558

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 8
Chunk 3558
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 in the month they are generated
by the solar project and registered with the local authority. The Company considers them unbilled at the end of the period if they have
not been invoiced to a third-party customer.

Cost of Revenues 

Cost of revenues primarily
consists of operations and maintenance expense, insurance premiums, property taxes, and other miscellaneous costs associated with the
operations of solar energy facilities. Costs are expensed as incurred.

F-16

Taxes Recoverable and Payable

The Company records taxes
recoverable when there has been an overpayment of taxes due to timing of the Value Added Tax (VAT) between vendors and customers. The
VAT tax can also be offset against a Country’s income taxes where the VAT was registered.

Capitalized Development Costs and Impairment
Policy

The Company capitalizes development
costs directly attributable to the design and construction of clean energy facilities, such as solar farms and battery storage systems,
in accordance with ASC 360, Property, Plant, and Equipment. These costs may include engineering and architectural fees, permitting expenses,
site preparation, and construction-related overhead. Capitalization commences when the project is deemed probable and continues until
the asset is substantially complete and ready for its intended use.

The Company evaluates the
recoverability of capitalized development costs whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. If such indicators are present, the Company performs a recoverability test by comparing the carrying amount of the asset
to the sum of the undiscounted future cash flows expected to result from its use and eventual disposition. If the carrying amount exceeds
the estimated future cash flows, an impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair
value. Additionally, if a project is abandoned or it is determined that the asset will not be completed or placed into service, the related
capitalized costs are written off in the period such determination is made as Development Costs and is recognized on the Consolidated
Statements of Operations and Other Comprehensive Income/ Loss).

Risks and Uncertainties

The Company’s operations
are subject to significant risks and uncertainties including financial, operational, technological, and regulatory risks and the potential
risk of business failure. Refer to Footnote 2 regarding going concern matters.

Fair Value of Financial Instruments

The Company measures its financial
instruments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction