Company: RIVF
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001493152-25-018109
Chunk: 213

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 3
Chunk 213
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 or less when purchased to be cash or cash equivalents.

    F-8

Film
Costs

In
accordance with ASC 926, Entertainment-Films, the Company reports film costs incurred as a separate asset on its consolidated
balance sheets (“Film costs”). Film costs include all direct negative costs incurred in the physical production of a film,
such as compensation of cast and rental facilities on location, as well as allocations of production overhead and capitalized interest
(if any). Further, costs incurred related to significant changes to a film are added to film costs and subsequently charged to expense
when the Company recognizes the related revenue.

Amortization
of Film Costs

As
the Company’s films are monetized on their own, the Company amortizes film costs using the individual-film-forecast-computation
method. Pursuant to that method, unamortized film costs as of the beginning of the current fiscal year are multiplied by the individual-film-forecast-computation
method fraction. To that extent, the Company will begin amortization of capitalized film costs when a film is released, and it begins
to recognize revenue from that film. The Company will review and revise its estimate of ultimate revenue as of each reporting date to
reflect the most currently available information. Changes to the estimate of ultimate revenue, if any, are accounted for prospectively.
Amortization of film costs is presented as film cost amortization on the face of the Company’s consolidated statements
of operations.

During
the twelve months ended June 30, 2025 and 2024, the Company recognized approximately $10.5 million and $0 of film cost amortization which
is presented as film cost amortization in the Company’s consolidated statements of operations.

Impairment
of Capitalized Film Costs

The
Company will test its unamortized film costs whenever events or changes in circumstances indicate that the fair value of a film may be
less than its unamortized costs. If the Company determines that the fair value of a film is less than its unamortized film costs, then
the unamortized capitalized costs for the film will be written down by the amount exceeding the film’s fair value. The unit of
account for impairment testing is the individual film being produced and the fair value is determined using a discounted cash flow technique.

Recognition
of Revenue from Contracts with Customers

The
Company recognizes revenue from its contracts with customers in accordance with the core principle outlined in ASC 606, Revenue from
Contracts