Company: GDSTR
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112608
Chunk: 26

Company: Goldenstone Acquisition Ltd.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 26
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 assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

    ●
    Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC Topic 820, approximates the carrying amounts represented in the accompanying
balance sheet, primarily due to their short-term nature.

Income Taxes

The Company accounts for income taxes under ASC
740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit
to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when
it is more likely than not that all or a portion of deferred tax assets will not be realized.

While ASC 740 identifies usage of an effective
annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are
significant, unusual or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the
timing of any potential business combination expenses and the actual interest income that will be recognized during the year. The Company
has taken a position as to the calculation of income tax expense in a current period based on ASC 740-270-25-3 which states, “If
an entity is unable to estimate a part of its ordinary income or loss or the related tax provision or benefit but is otherwise able to
make a reasonable estimate, the tax provision or benefit applicable to the item that cannot be estimated shall be reported in the interim
period in which the item is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly
take into account the usual elements that can impact its annualized book income and its impact on the effective tax rate. As such, the
Company is computing its taxable income or loss and associated income tax provision or benefit based on actual results through September
30, 2025 and 2024.

ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits
to be recognized,