Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 2252

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 7
Chunk 2252
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 income approach and based, in part, on significant inputs not observable
in the market. These inputs include, but are not limited to, estimates of future power generation, commodity prices, operating costs,
and appropriate discount rates. These inputs require significant judgments and estimates at the time of the valuation. Transaction costs,
including legal and financing fees directly related to the acquisition incurred, are capitalized as a component of the assets acquired.

The allocation of the purchase
price directly affects the following items in the Company’s consolidated financial statements:

    ●
    The amount of purchase price allocated to the various tangible and intangible assets and liabilities on the Company Balance Sheet; and

    ●
    The amounts allocated to all other tangible and intangible assets are amortized to depreciation or amortization expense, with the exception of favorable and unfavorable rate land leases and unfavorable rate Operation and Maintenance (O&M) contracts which are amortized to cost of revenue.

The period over which tangible
and intangible assets and liabilities are depreciated or amortized varies. Changes in the amounts allocated to these assets and liabilities
will have a direct impact on the Company’s results of operations.

Impairment of Long-Lived Assets and Identifiable
Intangible Assets

Identifiable intangible assets
with finite lives are amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The Company evaluates recoverability by comparing the carrying amount
of the asset group to the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the assets.
If the carrying amount of the asset group is not recoverable, an impairment loss is recognized equal to the amount by which the carrying
amount exceeds fair value, determined using discounted cash flows or other appropriate valuation techniques.

Goodwill Impairment

Goodwill represents the excess of the purchase price over the fair
value of net assets acquired in a business combination. The Company evaluates goodwill for impairment at least annually and whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is tested for impairment at the reporting
unit level by comparing the estimated fair value of the reporting unit to its carrying amount, including goodwill. If the carrying amount
exceeds the fair value, an impairment loss is recognized in an amount equal to the excess, limited to the carrying amount of goodwill.
The Company determines fair value using a combination of income and market approaches, as appropriate.

Income Taxes

Deferred taxes