Company: ALCE
Filing Date: 2025-01-27
Form Type: S-1
Source: 0001213900-25-007054
Chunk: 231

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-01-27
Form: S-1
Chunk 231
---
 retirement obligations,
(iv) non-controlling interest, and (v) other working capital items based in each case on their estimated fair values. The excess of the
purchase price, if any, over the estimated fair value of net assets acquired is recorded as goodwill. The fair value measurements of
the assets acquired, and liabilities assumed were derived utilizing an income approach and based, in part, on significant inputs not
observable in the market. These inputs include, but are not limited to, estimates of future power generation, commodity prices, operating
costs, and appropriate discount rates. These inputs required significant judgments and estimates at the time of the valuation. In addition,
acquisition costs related to business combinations are expensed as incurred.

When an acquired group of assets
does not constitute a business, the transaction is accounted for as an asset acquisition. The cost of assets acquired, and liabilities
assumed in asset acquisitions is allocated based upon relative fair value. The fair value measurements of the solar facilities acquired,
and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable
in the market. These inputs include, but are not limited to, estimates of future power generation, commodity prices, operating costs,
and appropriate discount rates. These inputs require significant judgments and estimates at the time of the valuation. Transaction costs,
including legal and financing fees directly related to the acquisition, incurred are capitalized as a component of the assets acquired.

The allocation of the purchase
price directly affects the following items in the Company’s consolidated financial statements:

| ● | The amount of purchase price allocated                                                      
 to the various tangible and intangible assets and liabilities on the Company Balance Sheet, |

| ● | The amounts allocated to all other                                                          
 tangible assets and intangibles are amortized to depreciation or amortization expense, with 
 the exception of favorable and unfavorable rate land leases and unfavorable rate Operation  
 and Maintenance (O&M) contracts which are amortized to cost of revenue; and                 |

The period of time over which
tangible and intangible assets and liabilities are depreciated or amortized varies, and thus, changes in the amounts allocated to these
assets and liabilities will have a direct impact on the Company’s results of operations.

Income Taxes

Deferred taxes are determined
using the asset and liability method; whereby, deferred tax assets are recognized for deductible temporary differences, operating loss
and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are
the differences between the reported amounts