Company: SCAG
Filing Date: 2025-11-12
Form Type: 20-F
Source: 0001213900-25-109190
Chunk: 204

Company: Scage Future
Filing Date: 2025-11-12
Form: 20-F
Item: Item 19
Chunk 204
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the vehicles sold by the Group, which included the Group’s best estimate of the future costs to be incurred in order to repair
or replace items under warranties and recalls when identified. These estimates were made based on actual claims incurred to date and
an estimate of the nature, frequency and magnitude of future claims with reference made to the past claim history. These estimates are
inherently uncertain given the Group’s relatively short history of sales, and changes to the Group’s historical or projected
warranty experience may cause material changes to the warranty reserve in the future. Warranty expense is recorded as a component of
cost of sales in the consolidated statements of operations and comprehensive loss. The accrued warranty expenses were US$ 327,605 440,371 5,649

Accordingly,
standard warranty is accounted for in accordance with ASC 460, “ Guarantees”. For the years ended June 30, 2025, 2024
and 2023, the Group only provided standard warranty and did not generate revenues from extended lifetime warranty services.

  (s)      Income taxes  

The
Group accounts for income taxes under ASC 740, “ Income Taxes”. The charge for taxation is based on the results for the
fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date. Provision for income taxes consists of taxes currently due plus deferred taxes. Current
income taxes are provided for in accordance with the laws of the relevant taxing authorities.

Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.

The
provisions of ASC 740-10-25, “ Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold
for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This
interpretation also provides guidance on the recognition of income tax assets and