Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 1120

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 2
Chunk 1120
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 Company performs a recoverability test by comparing the carrying amount of the asset
to the sum of the undiscounted future cash flows expected to result from its use and eventual disposition. If the carrying amount exceeds
the estimated future cash flows, an impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair
value. Additionally, if a project is abandoned or it is determined that the asset will not be completed or placed into service, the related
capitalized costs are written off in the period such determination is made as Development Costs and is recognized on the Consolidated
Statements of Operations and Other Comprehensive Income/ Loss).

Risks and Uncertainties

The Company’s operations
are subject to significant risks and uncertainties including financial, operational, technological, and regulatory risks and the potential
risk of business failure. Refer to Footnote 2 regarding going concern matters.

Fair Value of Financial Instruments

The Company measures its financial
instruments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.

US GAAP establishes a fair
value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value
hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest
priority to unobservable inputs. The three (3) levels of fair value hierarchy are described below:

Level 1 – Quoted market prices
available in active markets for identical assets or liabilities as of the reporting date.

Level 2 – Pricing inputs other
than quoted prices in active markets included in Level 1 that are either directly or indirectly observable as of the reporting date. Inputs
are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or
similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable
market data for substantially of the full term of the related assets or liabilities.

Level 3 – Pricing inputs that
are unobservable. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash
flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable.

The Company holds various
financial instruments that are not required to be measured at fair value. For cash and cash equivalents, restricted cash, accounts receivable