Company: LICN
Filing Date: 2025-04-29
Form Type: 20-F
Source: 0001213900-25-036244
Chunk: 109

Company: Lichen International Ltd
Filing Date: 2025-04-29
Form: 20-F
Item: Item 19
Chunk 109
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 eliminated upon consolidation. The results of subsidiaries acquired or disposed of are recorded
in the consolidated income statements from the effective date of acquisition or up to the effective date of disposal, as appropriate.
A subsidiary is an entity in which (i) the Company directly or indirectly controls more than50% of the voting power; or (ii) the Company
has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meetings
of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement
among the shareholders or equity holders.

Use of estimate and assumptions

The preparation of the Company’s consolidated
financial statements in conformity with U. S. GAAP 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 dates of the consolidated financial statements and
the reported amounts of revenues and expenses during the reporting periods presented. Estimates are adjusted to reflect actual experience
when necessary. Significant accounting estimates reflected in the Company’s consolidated financial statements include, allowance
for credit losses, useful lives of long-lived assets, impairment of long-lived assets and uncertain tax position. Actual results could
differ from these estimates.

Business combination

Business combinations are recorded using the acquisition
method of accounting. The assets acquired, the liabilities assumed, and any non-controlling interests of the acquiree at the acquisition
date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total
consideration transferred plus the fair value of any non-controlling interest of the acquiree and fair value of previously held equity
interest in the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of
the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition
is measured at the fair value as of the date of acquisition. Acquisition-related expenses and restructuring costs are expensed as incurred.

Accounting Standards Codification (“ ASC”)
805 establishes a measurement period to provide the Company with a reasonable amount of time to obtain the information necessary to identify
and measure various items in a business combination and cannot extend beyondone yearfrom the acquisition date.

Functional currency and foreign currency translation

The reporting currency of the Company is the United
States dollar (“ US$”). The Company’s operations are principally conducted through its subsidiaries in PRC