Company: DTCK
Filing Date: 2025-12-23
Form Type: 6-K
Source: 0001683168-25-009327
Chunk: 14

Company: DAVIS COMMODITIES Ltd
Filing Date: 2025-12-23
Form: 6-K
Chunk 14
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. If a PO is satisfied over time, revenue is recognized based on the percentage
of completion, reflecting the progress towards complete satisfaction of that PO. Typically, POs for products and services where the process
is as described below, the PO is satisfied at a point in time.

For the sale of sugar, rice and fat and oil products,
the Company typically receives purchase orders from its customers which will set forth the terms and conditions, including the transaction
price, products to be delivered, terms of delivery, and terms of payment. The terms serve as the basis of the performance obligations
that the Company must fulfill in order to recognize revenue. The key performance obligation is the delivery of the finished product to
the customer at their location, at which point title to that asset passes to the customer. The completion of this earning process is evidenced
by a transport document such as a bill of lading or delivery order. The Company recognizes gross product revenue at a time when the control
of products or services are transferred to customers. Typical payment terms set forth in the purchase order ranges from 30 to 90 days
from the date of delivery.

To distinguish a promise to provide products from
a promise to facilitate the sale from a third party, the Company considers the guidance of control in ASC 606-10-55-37A and the indicators
in 606-10-55-39. The Company considers this guidance in conjunction with the terms in the Company’s arrangements with both suppliers
and customers.

In general, the Company controls the products,
as it has the obligation to (i) fulfill the products’ delivery and (ii) bears any inventory risk as its legal owner. In addition,
when establishing the selling prices for delivery of the products, the Company has control to set its selling price to ensure it would
generate profit for the products delivered. The Company believes that all these factors indicate that the Company is acting as a principal
in this transaction. As a result, revenue from the sales of products is presented on a gross basis.

Shipping, storage and handling and insurance costs
associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and
are included in cost of revenue.

Revenue from rental of investment property

In accordance with ASC 842 Lease Topics, the Company
accounts for the rental of investment property as direct finance leases where, lease income from the perspective of lessor is recognized
on the Company’s statement of income on a straight-line basis over the term of