Company: GDSTR
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014248
Chunk: 89

Company: Goldenstone Acquisition Ltd.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 89
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 based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

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    Level 2 - Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

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    Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
  
 The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements” approximates the carrying
amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

Income Taxes

The Company accounts for income taxes under ASC
740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit
to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when
it is more likely than not that all or a portion of deferred tax assets will not be realized.

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ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides
guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

 While ASC 740 identifies usage of an effective
annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are
significant, unusual or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the
timing of any potential business combination expenses and the actual interest income that will be