Company: OSRH
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001213900-25-109054
Chunk: 15

Company: OSR Holdings, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 15
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 Group accounts for leases in accordance
with ASC Topic 842, Leases. The Group determines if an arrangement is or contains a lease at contract inception. The Group recognizes
a right-of-use (ROU) asset and a lease liability at the lease commencement date.

For operating leases, the lease liability
is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. For finance leases,
the lease liability is initially measured in the same manner and date as for operating leases and is subsequently measured at amortized
cost using the effective-interest method.

Key estimates and judgments include
how the Group determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) lease term, and (3)
lease payments.

●Topic 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in
the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Generally, the Group cannot determine the interest
rate implicit in the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s
deferred initial direct costs. Therefore, the Group generally uses its incremental borrowing rate as the discount rate for the lease.
The Group’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow
an amount equal to the lease payments under similar terms. Because the Group does not generally borrow on a collateralized basis, it uses
the interest rate it pays on its noncollateralized borrowings as an input to deriving an appropriate incremental borrowing rate, adjusted
for the amount of the lease payments, the lease term, and the effect on that rate of designating specific collateral with a value equal
to the unpaid lease payments for that lease.

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●The lease term for all of the Group’s leases includes the noncancellable period of the lease plus
any additional periods covered by either a Group option to extend (or not to terminate) the lease that the Group is reasonably certain
to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.

●Lease payments included in the measurement of the lease liability comprise the following:

–Fixed payments, including in-substance fixed payments, owed over the lease term (includes termination
penalties the Group would owe if the lease term reflects the Group’s exercise of a termination option);

–Variable lease payments that depend on an index or