Company: TOP
Filing Date: 2025-08-13
Form Type: 20-F
Source: 0001213900-25-075728
Chunk: 36

Company: TOP Financial Group Ltd
Filing Date: 2025-08-13
Form: 20-F
Item: Item 4A
Chunk 36
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 solution provides a variety
of functions suitable for front-end transaction executions and back-office settlement operations. We implement the initial installation
of such software for each customer and provides hosting services for a period of time, generally two years, as agreed in the contracts.
The initial installation is considered as a set-up activity, rather than a promised service to customer, which provides no incremental
benefit to customer beyond permitting the access and use the hosted application. We identify a single performance obligation from the
contracts with customers. We charge each customer a fixed amount of initial installation fee and the monthly service fee based on a fixed
rate per transaction executed on the platform with a minimum monthly fee. We recognize the trading solution services as satisfied over
the time.

Other service revenues

We provide other financial services including
securities brokerage, consulting services, and currency exchange services, and earn securities brokerage commissions, consultancy fee
income and other revenues, which are recognized when the service is rendered according to the relevant contracts.

Contract liabilities

Our contract liabilities include payments received
in advance of performance under structured note subscription service contracts which will be recognized as revenue as we executed the
subscription service with brokers under the contract, as well as the deferred installation service fee received from trading solution
services.

  Trading gains, interest income and other  

Trading gains and losses along with interest income
fall within the scope of ASC Topic 825, Financial Instruments, which is excluded from the scope of ASC Topic 606. Trading gains and losses
mainly consist of realized and unrealized gains and losses from the (1) investment in OTC derivative business. We subscribed for 50% of
the structured note portfolio. According to the agreements among the holders of structured notes, (i) in the event the portfolio makes
gains and declares distribution of dividends from the portfolio, we are entitled to 20% of dividends, (ii) in the event the portfolio
suffers losses, the other 50% holders of structured notes shall bear the losses until the net assets of the portfolio reached 55% of total
subscription amount, and (iii) in the event the net assets of portfolio is below 55% of subscription amount, the portfolio is terminated.
We terminated the investment in OTC derivative business in the year ended March 31, 2025; and (2) US common stocks, which are included
in Securities owned, at fair value.

Income tax expenses

We account for income taxes in accordance with
the U. S. GAAP. Under