Company: KNRX
Filing Date: 2025-03-05
Form Type: F-1/A
Source: 0001493152-25-009104
Chunk: 89

Company: KNOREX LTD.
Filing Date: 2025-03-05
Form: F-1/A
Chunk 89
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 the potential for recovery is considered remote. Management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary.

Capitalized software development costs

Software development costs consist of capitalized costs related to purchasing and development of internal-use software. The Company uses such software to provide services to its customers. The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended. These costs include personnel and personnel-related employee benefits for employees directly associated with the software development and external costs of the materials or services consumed in developing or obtaining the software.

Any costs incurred for upgrades and functionality enhancements of the software are also capitalized. Once this software is ready for use in providing the Company’s services, these costs are amortized on a straight-line basis over the three-year estimated useful life. The amortization is presented within amortization in the consolidated statements of operations and comprehensive loss.

Software development costs that are capitalized in internal-use software cost were US$434,811 and US$435,283 during the six months ended June 30, 2024 and 2023, respectively. Software development costs that are capitalized in internal-use software cost were US$875,768 and US$660,378 during the years ended December 31, 2023 and 2022, respectively.

Impairment for long-lived assets

In accordance with ASC 360-10, long-lived assets, including property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company will reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2024 and December 31, 2023, no impairment of long-lived assets was recognized.

Deferred revenue

Deferred revenue is recognized as advance payments from our customer prior to revenue recognition until the revenue recognition