Company: CHOW
Filing Date: 2025-03-19
Form Type: DRS/A
Source: 0001493152-25-010898
Chunk: 91

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-03-19
Form: DRS/A
Chunk 91
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 that M&S services are immaterial to the total transaction price, the software license and M&S services are treated as a single performance obligation for simplicity in revenue recognition.

| ● | Revenue                                                                                     
 for the combined performance obligation is recognized at a point in time when control of    
 the software license is transferred to the customer, typically upon delivery or activation. |
| ● | Any                                                                                         
 revenue associated with M&S services is included in the total transaction price of the      
 software license and recognized at the same point in time, as the distinction between the   
 two does not materially impact revenue timing.                                              |

Variable Consideration

We estimate variable consideration, including potential refunds, penalties, or performance bonuses, using the expected value or most likely amount method, depending on which better predicts the amount of consideration to which we will be entitled. We recognize revenue only to the extent that it is probable that a significant reversal of cumulative revenue will not occur. For the years ended December 31, 2022, and 2023, we did not have any contracts with variable consideration, and no adjustments to the transaction price were necessary after initial recognition.

Principal versus Agent Considerations

In evaluating whether we are acting as a principal or an agent in its contracts, we considered the guidance in ASC 606-10-55-36 through 55-40. This evaluation focused on identifying the specified goods or services promised to the customer and assessing whether we obtain control of these goods or services before they are transferred to the customer.

Our IT solutions involve services, hardware, software, and IT application products. In these contracts, we provide a bundle of goods and services necessary to fulfil the performance obligations. While certain components of the solution, such as hardware and software, may be sourced from third-party providers, we direct and integrate these inputs into a cohesive IT solution that meets the customer’s needs.

Specifically:

(i) Control of Goods and Services:

We take control of the services, hardware, software, and IT application products prior to their delivery to the customer. This is evidenced by the Company’s ability to direct the use of these goods and services and to obtain the benefits from them before transfer.

We assume inventory risk for these goods, either upon receipt from the third-party provider or during their customization or bundling into the overall IT solution.

2. Primary Responsibility for Fulfilment:

We are responsible for ensuring the customer receives the specified solution, including resolving any issues with the delivery or functionality of the underlying services, hardware, software, and applications. This indicates that we are