Company: CHOW
Filing Date: 2025-02-10
Form Type: DRS/A
Source: 0001493152-25-005658
Chunk: 198

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-02-10
Form: DRS/A
Chunk 198
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 from           
 the software license – The maintenance and support services do not alter the fundamental    
 usability of the software, as the customer can continue to use the software with or without 
 receiving M&S services.                                                                     |
| ● | The                                                                                         
 software license and M&S services are not highly interdependent – While M&S                 
 ensures the software remains functional over time, it does not significantly integrate with 
 or modify the software itself. The software retains its core functionality independently,   
 making M&S a separately identifiable promise rather than an input to a combined output.     |

Based on these factors, the Company concludes that the software license and M&S services are distinct performance obligations because they do not significantly affect each other’s standalone utility. This assessment aligns with ASC 606-10-25-21 and BC32, which emphasize that promises should be considered distinct if they do not integrate, modify, or significantly impact each other’s functionality.

However, the Company assessed that the M&S services are immaterial to the total transaction price and do not significantly impact the timing or amount of revenue recognized. In these cases, the software license and M&S services are treated as a single performance obligation, consistent with ASC 606 guidance on immaterial performance obligations.

Why Maintenance & Support Services Are Not an Input to a Combined Output

Unlike IT professional services, which significantly modify or integrate hardware and software to form a single functional solution, maintenance & support services:

| ● | Do                                                                                         
 not alter or enhance the software at the time of transfer – The customer receives          
 an operational software license upon delivery, and M&S provides future support rather      
 than modifying the existing software.                                                      |
| ● | Are                                                                                        
 not required for the customer to derive initial benefit from the software – The            
 customer can use the software independently, and the M&S services merely support long-term 
 usability.                                                                                 |
| ● | Do                                                                                         
 not significantly integrate with or change the underlying software – The services          
 are supplementary rather than essential for the initial use of the product.                |

As such, M&S services do not qualify as an input to a combined output under BC33(a) or (b) and are therefore evaluated separately from the software license.

Revenue Recognition Conclusion

Since the Company has determined 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