Company: OCG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043484
Chunk: 79

Company: Oriental Culture Holding LTD
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 79
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 based on lifetime expected losses considering historical, current, and forecasted conditions.
Management reviews its receivables on a regular basis to determine if the allowance for credit losses is adequate and adjusts the allowance
when necessary. Delinquent account balances are written-off against the allowance for credit losses after management has determined that
the likelihood of collection is not probable.

Impairment for long-lived assets

Long-lived assets, including property and equipment with finite lives
are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that
will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the
recoverability of the asset based on the undiscounted future cash flows the asset is expected to generate and recognize an impairment
loss when estimated discounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition
of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company reduces the carrying
amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable
market values.

Revenue recognition

The core principle underlying the revenue recognition
standard is that we will recognize revenue to represent the transfer of services to customers in an amount that reflects the consideration
to which we expect to be entitled in such exchange. This will require us to identify contractual performance obligations and determine
whether revenue should be recognized at a point in time or over time, based on when control of services transfers to a customer. Under
the guidance of FASB ASC 606, we are required to (a) identify the contract(s) with a customer, (b) identify the performance obligations
in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract
and (e) recognize revenue when (or as) we satisfy our performance obligation. Revenues are recorded, net of sales related taxes and surcharges.

We continue to derive our revenues from service
contracts with our customers with revenues being recognized upon performance of services. Persuasive evidence of an arrangement is demonstrated
via service contract and invoice; and the consideration to the customer is fixed upon acceptance of the sales contract. At times,
we offer incentives and rebates to our customers directly and we account for these incentives payable to customers as a reduction of contract
price. We have set up a