Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 797

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1C
Chunk 797
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, which have been
prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The preparation
of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported
amount of revenues and expenses during the reporting period. Our most critical estimates include those related to revenue recognition,
goodwill and intangible assets, accounting for business combinations, and accounting for stock-based compensation. On an ongoing basis,
we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe
are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions
or conditions.

We believe the following critical
accounting estimates affect the more significant judgments and estimates used in preparing our consolidated financial statements. See
the footnotes to our audited financial statements for the year ended December 31, 2024, included with this annual report for our Summary
of Significant Accounting Policies.

Revenue Recognition

The Company records revenue
based upon the consideration specified in the client arrangement, and revenue is recognized when the performance obligations in the client
arrangement are satisfied. A performance obligation is a contractual promise to transfer a distinct good or service to the customer. The
transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer
receives the benefit of the performance obligation. Under ASC 606, revenue is recognized when a customer obtains control of promised goods
or services in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

51

Goodwill and Intangible
Assets

Goodwill is tested for impairment
at least annually in the fourth quarter of our fiscal year. We first perform a qualitative assessment of whether it is more likely than
not that a reporting unit’s fair value is less than its carrying amount, and, if so, we then quantitatively compare the fair value
of our reporting units to their carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not impaired.
If the carrying amount of a reporting unit exceeds its fair value, we then record an impairment loss equal to the difference, up to the
carrying value of goodwill. The carrying values of identifiable