Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 153

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 19
Chunk 153
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 for lease and ROU assets would be measured
at fair value only if they were determined to be impaired.

(p) Commitments and contingencies

In
the normal course of business, the Company is subject to commitments and contingencies, including capital commitments, legal proceedings
and claims arising out of its business that relate to a wide range of matters, such as government investigations and tax matters. The
Company recognizes liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate
of the loss can be made. The Company may consider many factors in making these assessments on liability for contingencies, including
historical and the specific facts and circumstances of each matter.

MKDWELL
TECH INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(In
U. S. dollars, except share and per share data)

  SUMMARY                                         
  OF SIGNIFICANT ACCOUNTING POLICIES - Continued  
 ──────────────────────────────────────────────────

(q) Revenue recognition

The
Company recognizes revenues 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 Company’s
customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services,
reduced by value added tax (“ VAT”). To achieve the core principle of this standard, the Company applies the following five
steps:

  (i)        Identification                                                           
  (ii)       Identification                                                           
  (iii)      Determination                                                            
  (iv)       Allocation                                                               
  (v)        Recognition                                                              

The
Company’s revenues are generated through (i) sales of manufactured electronic products, (ii) commissioned processing service, (iii)
rental income and (iv) others. Each of our significant performance obligations and our application of ASC 606 to our significant revenue
arrangements are discussed in further detail below.

Sales
of manufactured electronic products

The
Company designs and manufactures industrial embedded systems and automotive electronics. The Company enters framework sales contract
with customers usually for one year. The framework sales contracts provide the general payment and delivery terms, and specific orders
shall be placed to the Company with determined unit price and purchase volume. Payment terms for sales of manufactured electronic products
are generally set at one month after the consideration becomes due and payable.

Under
the specific order, the Company identifies only one