Company: DDC
Filing Date: 2025-10-24
Form Type: F-1
Source: 0001213900-25-102214
Chunk: 276

Company: DDC Enterprise Ltd
Filing Date: 2025-10-24
Form: F-1
Chunk 276
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 products, cost of inventory is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow -movingmerchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write -downsare recorded in “cost of revenues” in the consolidated statements of operations and comprehensive loss. For agriculture products, the costs including but not limited to labor, fertilization, fuel, crop nutrition and irrigation, are capitalized into inventory throughout the respective crop cycle. Such costs are expensed as cost of revenues when the crops are sold.

F-26

DDC ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (m) Long-term investments The Company’s long -terminvestments include equity investments without readily determinable fair value. The Company measures the equity investment without readily determinable fair value at cost and adjusts for changes resulting from impairments and observable price changes in orderly transactions for identical or similar securities of the same issuer. The Company considers information in periodic financial statements and other documentation provided by the investees to determine whether observable price changes have occurred. The Company makes a qualitative assessment considering impairment indicators to evaluate whether the equity investment without a readily determinable fair value is impaired at each reporting period. The Company also writes down to its fair value if a qualitative assessment indicates that the investment is impaired and that the fair value of the investment is less than its carrying value. If an equity investment without a readily determinable fair value is impaired, the Company includes an impairment loss in net income equal to the difference between the fair value of the investment and its carrying amount. (n) Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and any recorded impairment. Depreciation on property, plant and equipment is calculated on the straight -linemethod over the estimated useful lives of the assets as follows:

| Operating equipment        |     | 3 – 5 years   |
| Electronic equipment       |     | 3 years       |
| Office equipment and other |     | 3 years       |
| Leasehold improvements     |     | Shorter of    
 2 – 3 years   
 or lease term |

Expenditures for repairs and maintenance are expensed as incurred, whereas the costs of renewals and