Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 696

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 2
Chunk 696
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 entities of which it is the primary beneficiary. Equity investments through which the Company
exercises significant influence over but does not control the investee and is not the primary beneficiary of the investee’s activities
are accounted for using the equity method. Investments through which the Company is not able to exercise significant influence over the
investee, and which do not have readily determinable fair values are accounted for under the cost method. All material inter-company
accounts have been eliminated in the consolidation.

    F-10

NETSOL
TECHNOLOGIES, INC.

Notes
to Consolidated Financial Statements

June
30, 2025 and 2024

Basis
of Presentation

The
accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United
States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Use
of Estimates

The
preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. The areas requiring significant estimates are the measurement of progress toward completion of
long-term software implementation projects, the allocation of the transaction price in multiple performance obligations, expected
credit loss on accounts receivable and revenues in excess of billings, provision for taxation, useful life of depreciable assets,
useful life of intangible assets, contingencies, the determination of stock-based compensation expense and estimated contract costs.
The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those
estimates.

Cash
and Cash Equivalents

Cash
and cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing
any corporate obligations.

Concentration
of Credit Risk

Cash
includes cash on hand and demand deposits in accounts maintained within the United States as well as in foreign countries. Certain financial
instruments, which subject the Company to concentration of credit risk, consist of cash and restricted cash. The Company maintains balances
at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for the banks located
in the United States. Balances at financial institutions within certain foreign countries are not covered by insurance, except balances
maintained in China are