Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 138

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 1
Chunk 138
---
 development of new solar parks and begins construction, the balance of these costs is reclassified to Construction in
Process on the Consolidated Balance sheet. Once construction is complete and all costs have been incurred, the final asset balance is
displayed in Property and Equipment. If the Company does not close on the prospective project, these costs are written off to Development
Costs on the Consolidated Statements of Operations and Comprehensive Income/(Loss).

Impairment of Solar Energy Facilities

The Company reviews its investments
in property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may
not be recoverable. Impairment is evaluated at the asset group level, which is determined based upon the lowest level of separately identifiable
cash flows. When evaluating for impairment, if the estimated undiscounted cash flows from the use of the asset group are less than the
asset group’s carrying amount, then the asset group is deemed to be impaired and is written down to its fair value. Fair value is
determined by net realizable value of the assets using ASC 820. The amount of the impairment loss is equal to the excess of the asset
group’s carrying value over its estimated fair value.

During the year ended December
31, 2023, the Company recorded an impairment loss of $11.8 million in the Consolidated Statement of Operations and Comprehensive Income/(Loss)
related to the Polish assets held for sale to reduce the carrying amount of the assets in the disposal group to their fair value less
costs to sell. This was recognized in discontinued operations on the Consolidated Statement of Operations and Comprehensive Income/(Loss).

During the year ended December
31, 2024, the Company recorded an impairment loss of $3.3 million in the Consolidated Statement of Operations and Comprehensive Income/(Loss)
related to the Spanish assets held for sale to reduce the carrying amount of the assets in the disposal group to their fair value less
costs to sell. This was recognized in Other Income/(Expense) for continuing operations on the Consolidated Statement of Operations and
Comprehensive Income/(Loss).

Deferred Financing Costs and Debt Discount
Amortization

The Company incurs expenses
related to debt arrangements. These deferred financing costs and debt discount costs are capitalized and amortized over the term of the
related debt or revolving credit facilities and netted against the related debt.

Asset Retirement Obligations

In connection with the acquisition
or development of solar energy facilities, the Company may have the legal requirement to remove