Company: DTCK
Filing Date: 2025-12-23
Form Type: 6-K
Source: 0001683168-25-009327
Chunk: 8

Company: DAVIS COMMODITIES Ltd
Filing Date: 2025-12-23
Form: 6-K
Chunk 8
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-8 |

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation

The accompanying unaudited interim condensed consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America
(“US GAAP”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”).

(b) Consolidation

The unaudited interim condensed consolidated financial
statements include the financial statements of the Company and its subsidiaries. All inter-company transactions, if any, and balances
due to, due from, long-term investment subsidiary, and registered paid in capital have been eliminated upon consolidation.

On consolidation the entities should be combined
for all periods that the relationship of common control started and the transaction would be treated as a capital transaction with any
gain or loss on acquisition adjusted through equity. The consolidated entity would not recognize any goodwill and/or gain/losses from
the acquisition and results of operations would be presented for all periods under common control.

The unaudited interim condensed consolidated financial
statements of the Company were prepared by applying the pooling of interest method. Under this method, the Company has been treated as
the holding company of the subsidiaries for the financial periods presented. Accordingly, the results of the Company include the results
of the subsidiaries for six-month periods ended June 30, 2024 and 2025. Such manner of presentation reflects the economic substance of
the companies, which were under common control throughout the relevant periods, as a single economic enterprise, although the legal parent-subsidiary
relationships may not have been established.

(c) Use of estimates

The preparation of unaudited interim condensed
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 date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to allowance for uncollectible
accounts receivable, inventory valuation, useful lives and impairment for property, plant and equipment, valuation allowance for deferred
tax assets, fair value of financial instruments, warranty liabilities, and contingencies. Actual results could vary from the estimates
and assumptions that were used.

(d) Risks and uncertainties

The main operations of the Company are located
in Singapore. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political,
economic, and legal environments in Singapore