Company: GCL
Filing Date: 2025-07-31
Form Type: 20-F
Source: 0001213900-25-069672
Chunk: 184

Company: GCL Global Holdings Ltd
Filing Date: 2025-07-31
Form: 20-F
Item: Item 19
Chunk 184
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INGS LTD
AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Warrants

The Company accounts for warrants
as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable
authoritative guidance in Financial Accounting Standards Board (“ FASB”) ASC 480, Distinguishing Liabilities from Equity (“ ASC
480”) and ASC 815, Derivatives and Hedging (“ ASC 815”). The assessment considers whether the warrants are freestanding
financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of
the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary
shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s
control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted
at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants
that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time
of issuance. The Company determined that upon further review of the warrant agreements, the Company concluded that its warrants qualify
for equity accounting treatment.

Upon completion of the Business
Combination, all of RFAC’s public and private placement warrants remain outstanding were replaced by the Company’s public
and private placement warrants. The Company treated such warrants replacement as a warrant modification and recognized incremental fair
value of $12,014as a deemed dividend paid to the warrant holders.

Revenue recognition

The Company follows the revenue
accounting requirements of Accounting Standards Update (“ ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic
606) (“ Accounting Standards Codification (“ ASC”) 606”). The core principle underlying the revenue recognition
of this ASU allows the Company to recognize revenue that represents the transfer of goods and services to customers in an amount that
reflects the consideration to which the Company expects to be entitled in such exchange. This requires the Company to identify contractual
performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods
and services transfers to a customer.

To achieve that core principle,
the Company applies five-step model to recognize revenue from customer contracts. The