Company: RETO
Filing Date: 2025-09-15
Form Type: F-1
Source: 0001213900-25-087644
Chunk: 102

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-09-15
Form: F-1
Chunk 102
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7.1957 |     |      | 7.0809 |

The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. F-36 Accounts Receivable and Allowance for Credit Losses The Company’s accounts receivable primarily consist of trade receivables. The Company records an allowance for credit losses that is based on customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. As of December 31, 2024 and 2023, substantially all of the accounts receivables are within six months, and the Company did not provide allowance against the accounts receivables. Current Expected Credit Losses In 2024, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 326 – “Financial Instruments – Credit Losses” (“ASC Topic 326”) for financial assets at amortized cost including accounts receivable and other receivables. This guidance replaced the “incurred loss” impairment methodology with an approach based on “expected losses” to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. No impact on the consolidated financial statements upon adoption. Fair Value of Financial Instruments and Fair Value Measurements The Company adopted the guidance of ASC 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

| ● | Level                                                                                                                               
 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.      |
| ● | Level                                                                                                                               
 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar  
 assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from 
 or corroborated