Company: AOSL
Filing Date: 2025-08-28
Form Type: 10-K
Source: 0001628280-25-041297
Chunk: 17

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-08-28
Form: 10-K
Item: Item 15
Chunk 17
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  The Company also allows stock rotation 

75

returns from certain distributors.  Stock rotation returns are governed by contract and are limited to a specified percentage of the monetary value of products purchased by distributors during a specified period.  The Company records an allowance for stock rotation returns based on historical returns, expected sales volumes and individual distributor agreements.  Allowance for price adjustments is recorded against accounts receivable and the provision for stock rotation rights is included in accrued liabilities on the consolidated balance sheets.The Company’s performance obligations relate to contracts with a duration of less than one year.  The Company elected to apply the practical expedient provided in ASC 606, “Revenue from Contracts with Customers”.  Therefore, the Company is not required to disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The Company recognizes the incremental direct costs of obtaining a contract, which consist of sales commissions, when control over the products they relate to transfers to the customer.  Applying the practical expedient, the Company recognizes commissions as expense when incurred, as the amortization period of the commission asset the Company would have otherwise recognized is less than one year. Packaging and testing services revenue is recognized at a point in time upon shipment of serviced products to the customer. License and Development Services Revenue Recognition In February 2023, the Company entered into a license agreement with a customer to license the Company’s proprietary SiC technology and to provide 24-months of engineering and development services for a total fee of $45.0 million.  The license and development fee required significant integration to create a combined output to the customer and was determined to be one performance obligation and was recognized over the 24 months when the Company performed the engineering and development services.  The Company used the input method to measure progress and recognize revenue, based on the effort expended relative to the estimated total effort to satisfy the performance obligation.  During the fiscal years ended June 30, 2025 and 2024, the Company recorded $13.8 million and $21.2 million of license and development revenue, respectively.  The amount of contract liability is recorded as deferred revenue on the consolidated balance sheets.  In addition, the Company also entered an accompanying supply agreement to provide limited wafer supply to the customer.  As of June 30, 2025, all revenue has been recognized and all consideration has been received associated with the license agreement.LeasesThe Company determines if an arrangement is a lease at inception.