Company: IPSI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110820
Chunk: 134

Company: Innovative Payment Solutions, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 134
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 be resolved when one or more
future events occur or fail to occur.

The Company’s management assesses
such contingent liabilities, and such assessment inherently involves an exercise of judgment.

If the assessment of a contingency
indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company’s unaudited condensed financial statements. If the assessment indicates that a potential
material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the
contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies
considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be
disclosed.

8

INNOVATIVE PAYMENT SOLUTIONS, INC.

Notes to the Unaudited
Condensed Financial Statements

2ACCOUNTING
POLICIES AND ESTIMATES (continued)

d)Fair
Value of Financial Instruments

The Company adopted the guidance of
Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes
methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 - Inputs are unadjusted quoted
prices in active markets for identical assets or liabilities available at the measurement date.

Level 2 - Inputs are unadjusted quoted
prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market
data.

Level 3 - Inputs are unobservable inputs
which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset
or liability based on the best available information.

The carrying amounts reported in the
balance sheets for cash, accounts receivable, notes receivable, other current assets, other assets, accounts payable, accrued liabilities,
and notes payable, approximate fair value due to the relatively short period to maturity for these instruments. The Company has identified
the short-term convertible debt and certain warrants attached to certain of the notes that are required to be presented on the balance
sheets at fair value in accordance with the accounting guidance.

ASC 825-10 “Financial Instruments”
allows entities to voluntarily