Company: RIVF
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001493152-25-018109
Chunk: 395

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 7
Chunk 395
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 To that extent, the Company will begin amortization of capitalized film costs when a film is released, and it begins
to recognize revenue from that film. The Company will review and revise its estimate of ultimate revenue as of each reporting date to
reflect the most currently available information. Changes to the estimate of ultimate revenue, if any, are accounted for prospectively.
Amortization of film costs is presented as film cost amortization on the face of the Company’s consolidated statements
of operations.

During
the twelve months ended June 30, 2025 and 2024, the Company recognized approximately $10.5 million and $0 of film cost amortization which
is presented as film cost amortization in the Company’s consolidated statements of operations.

Impairment
of Capitalized Film Costs

The
Company will test its unamortized film costs whenever events or changes in circumstances indicate that the fair value of a film may be
less than its unamortized costs. If the Company determines that the fair value of a film is less than its unamortized film costs, then
the unamortized capitalized costs for the film will be written down by the amount exceeding the film’s fair value. The unit of
account for impairment testing is the individual film being produced and the fair value is determined using a discounted cash flow technique.

Recognition
of Revenue from Contracts with Customers

The
Company recognizes revenue from its contracts with customers in accordance with the core principle outlined in ASC 606, Revenue from
Contracts with Customers. Specifically, “to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which we expect to be entitled in exchange for those goods or services”. To that extent, the Company
recognizes revenue in accordance with the ASC Topic by applying the following five steps:

    ●
    Step
    1-Identify the contract(s) with a customer

    ●
    Step
    2-Identify the performance obligations in the contract

    ●
    Step
    3-Determing the transaction price

    ●
    Step
    4-Allocate the transaction price to the performance obligations in the contract

    ●
    Step
    5-Recognize revenue when (or as) the Company satisfies a performance obligation

The
Company’s contracts with its customers currently contain a single performance obligation comprised of a license to motion picture
rights. In accordance with ASC 606, the Company ( i.e