Company: FOXX
Filing Date: 2025-01-10
Form Type: S-1
Source: 0001213900-25-002199
Chunk: 191

Company: Foxx Development Holdings Inc.
Filing Date: 2025-01-10
Form: S-1
Chunk 191
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 at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right. Operating lease right -of-use(“ROU”) assets and liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses incremental borrowing rate as effective interest rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments. Operating lease assets also include any initial direct costs and any lease payments made prior to the lease commencement date and are reduced by any lease incentives received. According to ASC 842 -10-15-37, a lessee may, as an accounting policy election by class of underlying asset, choose not to separate non -leasecomponents from lease components and instead to account for each separate lease component and the non -leasecomponents associated with that lease component as a single lease component. The Company has identified the common area maintenance (CAM) fee as a non -leasecomponent and elected to not separate it from the lease component. Operating lease assets are amortized on a straight -linebasis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization of ROU assets along with the change in the operating lease liabilities are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expenses for operating leases on a straight -linebasis over the lease term. The Company reviews the impairment of its right -of-useassets consistent with the approach applied for its other long -livedassets on an annual basis. The Company reviews the recoverability of its long -livedassets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre -taxcash flows of the related operations. The Company has elected to include the carrying amount of operating lease right -of-useassets in any tested asset group and include the associated lease payments in the undiscounted future pre -taxcash flows. For the years