Company: AOSL
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001387467-25-000044
Chunk: 43

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 43
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 on or after January 1, 2025. In particular, the CIT applies to multinational companies with annual revenue of 750 million euros or more in the consolidated financial statements of the ultimate parent entity for at least two of the four fiscal years immediately preceding the fiscal year when the CIT may apply.

The Company is not in a position to determine whether the annual revenues may meet and/or cross the 750 million Euro threshold for at least two of the four fiscal years immediately preceding the fiscal year when CIT may apply.  The Company continues to monitor and assess if and when it may be within the scope of the CIT.  If we become subject to the Bermuda CIT, we may be subject to additional income taxes, which may adversely affect our financial position, results of operations and our overall business.

Equity method investment income/loss from equity investee 

33

We use the equity method of accounting when we have the ability to exercise significant influence, but we do not have control, as determined in accordance with generally accepted accounting principles, over the operating and financial policies of the company.  Effective December 2, 2021, we reduced our equity interest in the JV Company below 50% of outstanding equity ownership and experienced a loss of control of the JV Company.  As a result, we record our investment under equity method of accounting.  Since we are unable to obtain accurate financial information from the JV Company in a timely manner, we record our share of earnings or losses of such affiliate on a one quarter lag. 

We record our interest in the net earnings of the equity method investee, along with adjustments for unrealized profits or losses on intra-entity transactions and amortization of basis differences, within earnings or loss from equity interests in the Condensed Consolidated Statements of Income (Loss).  Profits or losses related to intra-entity sales with the equity method investee are eliminated until realized by the investor or investee.  Basis differences represent differences between the cost of the investment and the underlying equity in net assets of the investment and are generally amortized over the lives of the related assets that gave rise to them.  Equity method goodwill is not amortized or tested for impairment. Instead the total equity method investment balance, including equity method goodwill, is tested for impairment.  We review for impairment whenever factors indicate that the carrying amount of the investment is determined to be other than temporary.  In such a case, the decrease in value is recognized in the period the impairment occurs in the Condensed Consolidated Statements of Income (Loss).

Results