Company: FLYE
Filing Date: 2025-07-15
Form Type: 10-K
Source: 0001213900-25-064293
Chunk: 556

Company: Fly-E Group, Inc.
Filing Date: 2025-07-15
Form: 10-K
Item: Item 1C
Chunk 556
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 and concurrent with each lease revenue-producing transaction and collected by the Company from the lessee are excluded from
the consideration in its lease arrangements. The Company mitigates residual value risk of its leased assets by performing regular maintenance
and repairs, as necessary, and through periodic reviews of asset depreciation rates based on the Company’s ongoing assessment of
present and estimated future market conditions.

F-16

Lessee

The Company recognizes right-of-use assets and
lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted
for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms. Leases
with an initial term of 12 months or less are short-term leases and not recognized as operating lease right-of-use assets and operating
lease liabilities on the consolidated balance sheets. The Company recognizes lease expense for short-term leases on a straight-line basis
over the lease term.

Right-of-use assets are initially measured at
cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives
received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any
remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the
straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of
the lease terms.

Lease liabilities are initially measured at the
present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend
on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease if that rate can be readily determined.
If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate. Subsequently, lease liabilities
are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there
is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those
payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying
amount of the right-of-use assets is