Company: LRHC
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032211
Chunk: 1691

Company: La Rosa Holdings Corp.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 5
Chunk 1691
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 balance
sheet net of the allowance for credit losses. The allowance is determined by a number of factors, including age of the receivable, current
economic conditions, historical losses, and management’s assessment of the financial condition of the debtor. Receivables are written
off once they are deemed uncollectible, which may arise when the debtor is deemed unable to pay the amounts owed to the Company. The allowance
for credit losses was $166,504 as of December 31, 2024. The allowance for credit losses was $83,456, including $35,360 from the six acquisitions
acquired in the fourth quarter of 2023, as of December 31, 2023. Estimates of uncollectible accounts receivable are recorded to general
and administrative expense.

Concentration of Credit Risk

Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash. The Company reduces credit risk by placing its cash and cash equivalents
with major financial institutions with high credit ratings. The Company maintains certain bank accounts in excess of FDIC insured limits
of $250,000.

Leases

Under Financial Accounting Standards Board (“FASB”)
ASC Topic 842, Leases, (“ASC 842”), the Company determines whether an arrangement is or contains a lease at contract
inception. Right-of-use assets and lease liabilities, which are disclosed on the consolidated balance sheets, are recognized at the commencement
date of the lease based on the present value of the lease payments over the lease term using the Company’s incremental borrowing
rate on the lease commencement date. Lease expense is recognized on a straight-line basis over the term of the lease. Short-term leases,
defined as leases with an initial term of twelve months or less, are not recorded on the consolidated balance sheets.

Property and Equipment, Net

Property and equipment, net is stated at cost
less accumulated depreciation and accumulated impairment, if any. Cost of maintenance and repairs that do not improve or extend the lives
of the respective assets are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful lives
of the assets, as follows:

  Computer Equipment   3 years   Furniture and fixtures   7 years  

F-10

Long-lived Assets Including Acquired Intangible
Assets

Long-lived assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. The
carrying