Company: GCL
Filing Date: 2025-08-27
Form Type: DRS
Source: 0001213900-25-080905
Chunk: 223

Company: GCL Global Holdings Ltd
Filing Date: 2025-08-27
Form: DRS
Chunk 223
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IES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</div>

Accounts receivable are
recognized and carried at the original invoiced amount less an allowance for credit losses and do not bear interest. Customers who owed
accounts receivables, are granted credit terms based on their credit metrics. The Company measured the credit loss against its accounts
receivable and records the allowance for credit losses as an offset to accounts receivable, and the estimated credit losses charged to
the allowance is classified as “general and administrative” in the consolidated statements of operation and comprehensive
income (loss). The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics
exist, primarily based on similar business line, service or product offerings and on an individual basis when the Company identifies
specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company
considers historical collectability based on past due status, the age of the accounts receivable balances, credit quality of the Company’s
customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecast of future economic conditions
and other factors that may affect the Company’s ability to collect from customers. As of March 31, 2025 and 2024, the Company
provided allowance for credit loss of $248,956 and $325,457, respectively.

Inventories
are stated at the lower of cost or net realizable value. Weighted average method is the inventory
valuation method applied to these inventories. Inventories mainly include physical console
game compact disc, gaming hardware and accessories which are purchased from the Company’s
suppliers as merchandized goods. Inventories are reviewed for potential write-down for estimated
obsolescence or unmarketable inventories which equals the difference between the costs of
inventories and the estimated net realizable value based upon forecasts for future demand
and market conditions. When inventories are written down to net realizable value, it is not
marked up subsequently based on changes in underlying facts and circumstances. For the years
ended March 31, 2025, 2024 and 2023, $211,356, $468,941 and $288,604 of inventories write-down
were recorded, respectively.

Other receivables primarily
include receivables from the marketing expense related in promoting console game that the Company paid on behalf of vendors, and refundable
deposit such as rental deposit. The Company measures