Company: MEGL
Filing Date: 2025-04-14
Form Type: 20-F
Source: 0001641172-25-004566
Chunk: 136

Company: Magic Empire Global Ltd
Filing Date: 2025-04-14
Form: 20-F
Item: Item 19
Chunk 136
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 upon completion of the FA service,
which is evidenced by listing of the clients.

In some cases, the Group is entitled to
the discretionary bonus only upon listing, amount of which is to be decided by the clients. The Group accounts for the discretionary
bonus as variable consideration. The amount of such variable consideration should not be included in the transaction price, since it
is probable that a significant reversal of cumulative revenue recognized will occur resulting from a change in estimate of the consideration
the Group will receive upon client’s listing. The Group will recognize the revenue of the discretionary bonus at each reporting date
when the uncertainty is resolved. During the year ended December 31, 2024 and 2023, the Group received discretionary bonus of HK$2,500,000(US$321,846)
and nil, respectively.

MAGIC
EMPIRE GLOBAL LIMITEDNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

  SUMMARY                                     
  OF SIGNIFICANT ACCOUNTING POLICIES (cont.)  
 ──────────────────────────────────────────────

  CA                                                                                                                                 

The
Group enters a distinct contract with its clients for the provision of CA services. The Group concludes that each monthly CA service
(1) is distinct and (2) meets the criteria for recognizing revenue over time. In addition, the Group concludes that the services provided
each month are substantially similar and result in the transfer of substantially similar services to the clients each month. That is,
the benefit consumed by the clients is substantially similar for each month, even though the exact volume of services may vary. Therefore,
the Group concludes that the monthly CA services satisfy the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance
obligation. There is no variable consideration, significant financing components or noncash consideration in the contracts. Accordingly,
based on the output methods, the Group recognizes revenues from CA services on a monthly basis when it satisfies its performance obligations
throughout the contract terms. There is no contract asset that the Group has right to consideration in exchange for its CA services that
the Group has transferred to its clients. Such right is not conditional on something other than the passage of time.

  Corporate                                                                                        

The
Group enters a distinct contract with its clients for the provision of corporate services. The Group concludes that each monthly corporate
service (1) is distinct and (2) meets the criteria for recognizing revenue over time. In addition, the Group concludes that the services
provided each month are