Company: TOP
Filing Date: 2025-08-13
Form Type: 20-F
Source: 0001213900-25-075728
Chunk: 105

Company: TOP Financial Group Ltd
Filing Date: 2025-08-13
Form: 20-F
Item: Item 19
Chunk 105
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 is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated
using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred
tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the
carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized
to the extent that it is probable that taxable income to be utilized with prior net operating loss carried forwards. Deferred tax is
calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred
tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all
of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing
authorities.

An
uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained
in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that
is greater than 50

Warrant

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”) Accounting Standards
Codification (“ 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, 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 additional paid-in capital at the time of issuance.