Company: WCT
Filing Date: 2025-05-16
Form Type: 20-F
Source: 0001213900-25-044576
Chunk: 138

Company: Wellchange Holdings Co Ltd
Filing Date: 2025-05-16
Form: 20-F
Item: Item 19
Chunk 138
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 reflect the likelihood of realization of deferred tax assets. Realization of deferred
tax assets, including those related to the U. S. net operating loss carry-forwards, is dependent upon future earnings, if any, of
which the timing and amount are uncertain.

The Company adopted ASC 740-10-05, Income
Tax, which provides guidance for recognizing and measuring uncertain tax positions, and prescribes a threshold condition that a tax position
must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. It also provides accounting
guidance on derecognizing, classification and disclosure of these uncertain tax positions.

The Company’s policy on classification of
all interest and penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense.

Comprehensive income

The Company presents comprehensive income in accordance
with ASC Topic 220, Comprehensive Income, (“ ASC 220”). ASC 220 states that all items that are required
to be recognized under accounting standards as components of comprehensive income be reported in the consolidated financial statements.
The components of comprehensive income include the net income and foreign currency translation for the years.

F-18

WELLCHANGE HOLDINGS COMPANY LIMITED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
AND PRACTICES(cont.)

Commitments and contingencies

In the normal course of business, the Company
is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters,
such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable
that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments
including historical and the specific facts and circumstances of each matter.

Earnings (loss) per share

The Company computes earnings per share, or EPS,
in accordance with ASC Topic 260, Earnings per Share(“ ASC 260”). ASC 260 requires companies to
present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for
the year. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e. g., convertible securities,
options and warrants) as if they had been converted at the beginning of the years presented, or issuance date, if later. Potential
ordinary shares that have an anti-dilutive effect (i. e., those