Company: LICN
Filing Date: 2025-04-29
Form Type: 20-F
Source: 0001213900-25-036244
Chunk: 117

Company: Lichen International Ltd
Filing Date: 2025-04-29
Form: 20-F
Item: Item 19
Chunk 117
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 The core principle of the guidance is that an entity should recognize revenue to
depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. Revenue is the transaction price the Company expects to be entitled to in exchange
for the promised goods or services in a contract in the ordinary course of the Company’s activities and is recorded net of value-added
tax (“ VAT”). To achieve that core principle, the Company applies the following steps:

Step 1: Identify the contract (s) with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance
obligations in the contract

Step 5: Recognize revenue when (or as) the entity satisfies
a performance obligation

No practical expedients were used when the Company
adopted the ASC 606. Revenue recognition policies for each type of revenue stream are as follows:

Financial and taxation solution services

Revenues from financial and taxation solution
services for which control of services is transferred over time is recognized progressively based on the contract costs incurred to date
(primarily comprising staff costs and industry expert cost by reference to the time as recorded in the monthly working record incurred
to date) as compared to the total costs to be incurred under the transaction (by reference to the total budgeted time of the respective
project) to depict the Company’s performance in transferring control of services promised to a customer. The Company recognizes
revenues over time only if it can reasonably measure its progress toward complete satisfaction of the performance obligation. The Company
normally requires the customers to pay a deposit upon entering into the service contracts.

Education support services - sales of teaching
and learning materials

Revenues from the sales of educational materials
for which control of assets is transferred at a point in time is recognized when the goods are delivered to customers. The Company does
not provide any sales-related warranties. There is no right of return by customers under the Company’s standard contract terms.

F-16

Education support services - Provision of marketing,
operation and technical support services

Revenues from provision of marketing, operation and technical support
services from the partnered institutions is recognized on a straight-line basis over the term of the agreement. The transaction price
inclusive of value added tax as received from customers in advance is recognized as a contract liability at the time of the initial transaction
and is released on