Company: SDAWW
Filing Date: 2025-12-22
Form Type: 6-K
Source: 0001213900-25-124170
Chunk: 3

Company: SunCar Technology Group Inc.
Filing Date: 2025-12-22
Form: 6-K
Chunk 3
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 of deferred tax assets, and warrant liabilities. Changes in facts and circumstances may result in revised estimates. Actual
results could differ from those estimates, and as such, differences may be material to the unaudited condensed consolidated financial
statements.

F-7 SUNCAR TECHNOLOGY GROUP INC NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In U.S. Dollar thousands, except share and per share data)

| (c). | Accounts receivable, net |

Accounts receivable, net are stated at the original
amount less allowances for credit losses. Accounts receivable are recognized in the period when the Group has provided services to its
customers and when its right to consideration is unconditional. The Group adopted ASC Topic 326, Financial Instruments-Credit Losses (Topic
326) and assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist, primarily
based on similar business lines, and on an individual basis when the Group identifies specific customers with known disputes or collectability
issues. In determining the amount of the allowance for credit losses, the Group considers historical collectability based on past due
status, the age of the accounts receivable balances, credit quality of the Group’s customers based on ongoing credit evaluations,
current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the
Group’s ability to collect from customers.

| (d). | Warrant |

The Group 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 and whether the warrant holders could potentially require “net
cash settlement” in a circumstance outside of the Company’s control, 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.