Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 148

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 5
Chunk 148
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, involve the most significant judgments and estimates used in the preparation
of our financial statements. You should read the descriptions of critical accounting policies, judgments and estimates in our consolidated
financial statements and other disclosures included in this Report.

The following accounting
estimates relate to the significant areas involving management’s judgments and estimates in the preparation of our financial statements,
and are those that it believes are the most critical to aid the understanding and evaluation of this management discussion and analysis:

Long-lived Assets

We have long-lived assets
that consist primarily of equipment stated at cost, net of accumulated depreciation and accumulated impairment loss. The depreciation
charge is calculated on a straight-line basis and depends on the estimated useful lives of the mining equipment. Our mining equipment
is primarily digital asset mining rigs, which are largely homogeneous and have the same useful lives. We update the estimated useful lives
of our mining equipment periodically as information on the operations of the mining rigs indicate changes are required. We re-assess the
estimated useful lives of our mining equipment when there are indicators that the productivity of the mining assets is higher or lower
than the assigned estimated useful lives.

Management reviews long-lived
assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not
be recoverable. Recoverability of assets is measured by comparing their carrying amount to the undiscounted future cash flows expected
to be generated thereby. If such assets are not recoverable based on that test, impairment is recorded in the amount by which the carrying
amount of the assets exceeds their fair value as determined in accordance with Accounting Standard Codification (“ ASC”) 820.

Income Taxes

The primary objectives of
accounting for income taxes are to recognize the amount of income taxes payable for the current year, and to recognize deferred tax liabilities
and assets for future tax consequences of events that have been recognized in our financial statements. We account for income taxes in
accordance with ASC 740 - Income Taxes, using the asset and liability method. Under this method, deferred tax assets and liabilities are
calculated based on enacted tax rates in the respective jurisdiction and are recognized for expected future tax consequences of temporary
differences between the financial reporting and tax basis of assets and liabilities and operating losses and tax credit carryforwards.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period. Management makes
assumptions, judgments and estimates to determine the income tax benefit or expense and deferred tax assets and liabilities.