Company: CHOW
Filing Date: 2025-03-19
Form Type: DRS/A
Source: 0001493152-25-010898
Chunk: 92

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-03-19
Form: DRS/A
Chunk 92
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 accountable for the overall performance of the arrangement.

3. Pricing Discretion:

We determine the pricing for the bundled solution, further supporting its role as principal.

Although we partner with cloud and technology service providers and outsources certain components to third-party providers, these third parties act as subcontractors or suppliers within our broader performance obligation. We do not merely arrange for the third parties to provide goods or services directly to the customer.

Based on the above, we concluded that we act as the principal in these transactions because we control the specified goods and services before transferring them to the customer.

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Accounts Receivable, Net

Accounts receivable primarily consists of amounts due from our customers and related companies. We record these balances net of an allowance for expected credit losses, which is established in accordance with ASC 326, Financial Instruments—Credit Losses.

We estimate our allowance for expected credit losses using a forward-looking model that incorporates historical loss experience, current conditions, and reasonable and supportable forecasts of future economic conditions. We determine the allowance is determined through Portfolio-level analysis, which applies a historical loss rate to pools of receivables with similar risk characteristics, adjusted for expected changes in the macroeconomic environment and industry trends.

Our management evaluates receivables based on factors such as the aging of receivables, historical collection patterns, and the customer’s ability to pay, as well as broader economic factors that may affect the collectability of receivables. Significant judgments include evaluating the impact of economic downturns, industry-specific risks, and other external factors on customer creditworthiness.

Receivables are written off against the allowance when all reasonable collection efforts have been exhausted and our management determines that the likelihood of collection is remote. The timing of the write-off is based on specific criteria, including the length of time a receivable has been past due, customer bankruptcy, and other significant credit events.

As of December 31, 2022 and 2023, we had an allowance for expected credit losses of HK$842,674 and HK$493,720 (US$63,297), respectively. The reduction in the allowance reflects improvements in collection processes and positive shifts in economic conditions impacting our customers during the year.

Contract Assets and Contract Liabilities

Contract assets represent our right to consideration in exchange for goods or services that have been transferred to the customer, but for which billing has not yet occurred under the terms of the contract. We recognize contract assets when we satisfy a performance obligation and has a right to payment, but the payment is conditional on