Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 701

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 2
Chunk 701
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 are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company
is able to realize their benefits, or that future deductibility is uncertain.

When
tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities,
while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately
sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available
evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution
of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that
meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent
likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions
taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the balance sheets
along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest
and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations.

Foreign
Currency Translation

The
Company transacts business in various foreign currencies. The following table represents the functional currencies of the Company and
its subsidiaries:

SCHEDULE
OF FOREIGN CURRENCY TRANSLATION

    The
    Company and Subsidiaries
     
    Functional
    Currency

    NetSol
    Technologies, Inc.
     
    USD
  
    NTA
     
    USD
  
    Otoz 
     
    USD
  
    NTE
     
    British
    Pound
  
    AEL
     
    British
    Pound
  
    VLSH
     
    British
    Pound
  
    VLS
     
    British
    Pound
  
    VLSIL
     
    Euro
  
    NetSol
    PK
     
    Pakistan
    Rupee
  
    Connect
     
    Pakistan
    Rupee
  
    NetSol
    Innovation
     
    Pakistan
    Rupee