Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 176

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 18
Chunk 176
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 valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures.
The three levels of the fair value hierarchy are as follows:

  Level                                                                                                                        

  Level                                                                                                                                     

  Level                                                                                      

Financial
instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost,
which approximate fair value because of the short period of time between the origination of such instruments and their expected realization
and their current market rates of interest.

Interest
rates that are currently available to the Company for issuance of long-term debt and capital lease with similar terms and remaining maturities
are used to estimate the fair value of the Company’s long-term debt. The fair value of the Company’s long-term debt approximated
the carrying value at December 31, 2024, and 2023, as the weighted average interest rate on these long-term debt approximates the market
rate for similar debt.

Revenue
Recognition

The
Company elected to adopt Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606), effective
as of October 1, 2019. Accordingly, the consolidated financial statements for the year ended December 31, 2024 and 2023 are presented
under ASC 606. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services. The Company’s revenues are generated from the production and sales of premium personal care electric appliances
(principally electrical hair styling products such as straighteners, curlers, trimmers, etc.) and toy products. This performance obligation
is satisfied at a point of time and recognized in revenue upon the transfer of control of the goods to the customers

Interest
income from banks is recognized when received.

Cost
of revenue

The
cost of revenue primarily consists of the cost of raw materials, direct labor costs and factory overhead.

Employee
benefit

The
full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits,
unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to
accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in
accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans