Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 108

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 5
Chunk 108
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 assets of the acquiree is recorded as goodwill. If the cost of acquisition is
less than the acquisition date amounts of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated
income statements. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments
to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Subsequent to the conclusion of the measurement
period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any further adjustments
are recorded in the consolidated income statements.

For the Company’s non-wholly
owned subsidiaries, a noncontrolling interest is recognized to reflect the portion of equity that is not attributable, directly, or indirectly,
to the Company.

Use of Estimates and Assumptions

The preparation of consolidated
financial statements in conformity with U. S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s
consolidated financial statements include the useful lives of property and equipment, the imputed interest rate of leases, impairment
of long-lived assets, allowance for doubtful accounts, provision for contingent liabilities, revenue recognition, deferred taxes and uncertain
tax position. Actual results could differ from these estimates.

Revenue Recognition

The Company elected to adopt Accounting
Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606), effective as of October 1, 2019. Accordingly,
the consolidated financial statements for the years ended December 31, 2024, and 2023 are presented under ASC 606. 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. The Company’s
revenues are generated from the production and sales of premium personal care electric appliances (principally electrical hair styling
products such as straighteners, curlers, trimmers, etc.) and toy products. This performance obligation is satisfied at a point of time
and recognized in revenue upon the transfer of control of the goods to the customers. Interest income from banks is recognized when received.

Cost of Revenues

The cost of revenue primarily
consists of the