Company: SEAH
Filing Date: 2025-07-24
Form Type: DRS
Source: 0001213900-25-067275
Chunk: 174

Company: Seahawk Recycling Holdings, Inc.
Filing Date: 2025-07-24
Form: DRS
Chunk 174
---
 of the operating lease right -of -useassets. Interest expense is determined using the effective interest method. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Group as a lessor When the Group acts as a lessor, it classifies at lease inception (or when there is a lease modification) each of its leases as either an operating lease or a finance lease. Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income is recognized over the non -cancellablelease term on a straight -linebasis and is included in revenue in the consolidated statement of operations and comprehensive income due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis on the rental income. The Group does not have any sales -typeor direct financing leases for the years ended March 31, 2025 and 2024. F-13

SEAHAWK RECYCLING HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In U.S. Dollar, except for share data) 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) (p)Revenue recognition The Group recognizes revenue pursuant to ASC 606, Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, revenues from contracts with customers are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services, reduced by consumption tax. To achieve the core principle of this standard, the Group applied the following five steps: Step 1: Identification of the contract, or contracts, with the customer; Step 2: Identification of the performance obligations in the contract; Step 3: Determination of the transaction price; Step 4: Allocation of the transaction price to the performance obligations in the contract; Step 5: Recognition of the revenue when, or as, a performance obligation is satisfied. The Group currently generates its revenue from the following main sources: Revenue from recycling sales Revenue from recycling sales primarily consists of scrap metal and waste paper sold to both domestic and international customers. Revenue is recognized at a point in time. The exact timing of which depends on the terms of each contract, either upon the goods are loaded onto the vessel