Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 2122

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 7
Chunk 2122
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 may consist of cash, equity, or a combination of the two, in a business combination
to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase
price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value
of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation
methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies.

To date, the assets acquired and liabilities assumed
in the Company’s business combinations have primarily consisted of goodwill and finite-lived intangible assets, consisting primarily
of franchise agreements, agent relationships, real estate listings, non-compete agreements, and right-of-use assets. The estimated fair
values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating
performance and cash flows of the acquired business, the nature of the business acquired, and the specific characteristics of the identified
intangible assets. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could
change due to numerous factors, including market conditions, technological developments, economic conditions and competition. In connection
with the determination of fair values, the Company engages independent appraisal firms to assist with the valuation of intangible assets
acquired and certain assumed obligations.

Transaction costs associated with business combinations
are expensed as incurred.

Goodwill

Goodwill is the excess of cost over the fair value
of net assets acquired. Goodwill is not amortized but tested for impairment annually or more frequently if certain circumstances indicate
a possible impairment may exist. The Company recognized goodwill for the first time in the fourth quarter of 2023. The Company performed
a qualitative assessment as of October 1, 2024 and determined it is more likely than not that the fair value of a reporting unit is less
than its carrying value. The qualitative assessment included, but is not limited to, market and macroeconomic conditions, cost factors,
cash flows, changes in key management personnel, and the Company’s share price. The result of this assessment determines whether
it is necessary to perform a quantitative goodwill impairment test. As a result of this assessment the Company has determined that there
is impairment in goodwill as of December 31, 2024 and it has recorded a $787,438 impairment charge against goodwill.

F-11

Revenue Recognition

The Company applies the provision of F