Company: RIVF
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024216
Chunk: 72

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 72
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 the six months ended December 31, 2024 as compared to the six months ended December 31,
2023 was primarily related to participation costs recognized in the amount of $1,995,058 in the current period, related to a film sale.
The remainder of the increases were primarily due to general organizational ramp-up to administratively support the Company’s in-production
and pre-production films.

Other
(expense) income

For
the six months ended December 31, 2024, other income (expense) totaled ($410,571) which consisted of interest expense of ($412,547) and
other income of $1,976. For the six months ended December 31, 2023, other income (expense) totaled $0. The increase in other (expense)
income was primarily related to the increase in notes payable during the six months ended December 31, 2024 as compared to the six months
ended December 31, 2023.

Critical
Accounting Estimates

Impairment
of Capitalized Production Costs

The
Company will test its unamortized production costs whenever events or changes in circumstances indicate that the fair value of a film
may be less than its unamortized costs. If the Company determines that the fair value of a film is less than its unamortized production
costs, then the unamortized capitalized costs for the film will be written down by the amount exceeding the film’s fair value.
The unit of account for impairment testing is the individual film being produced and the fair value is determined using a discounted
cash flow technique.

Recognition
of Revenue from Contracts with Customers

The
Company recognizes revenue from its contracts with customers in accordance with the core principle outlined in ASC 606, Revenue from
Contracts with Customers. Specifically, “to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which we expect to be entitled in exchange for those goods or services”. To that extent, the Company
recognizes revenue in accordance with the ASC Topic by applying the following five steps:

●Step
                                            1-Identify the contract(s) with a customer

●Step
                                            2-Identify the performance obligations in the contract

●Step
                                            3-Determing the transaction price

●Step
                                            4-Allocate the transaction price to the performance obligations in the contract

●Step
                                            5-Recognize revenue when (or as) the Company satisfies