Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 174

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 18
Chunk 174
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 Estimated     
                             useful life   
 ───────────────────────────────────────────
  Machinery & equipment      3 - 10 years  
  Electronic equipment       5 years       
  Office equipment           3 - 5 years   
  Motor vehicles             3 - 4 years   
  Computer and software      3 years       

The
cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is
included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs, which do not materially
extend the useful lives of the assets, are charged to earnings as incurred, while additions, renewals and betterments, which are expected
to extend the useful life of assets, are capitalized.

Leases

Leases
that transfer substantially all of the benefits and risks incidental to the ownership of assets are accounted for as finance leases as
if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted
for as operating leases. The Company has no finance leases.

Under
ASC 842, the Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets and operating lease liabilities
are initially recognized based on the present value of future lease payments at lease commencement. The operating lease right-of-use
asset also includes any lease payments made prior to lease commencement and the initial direct costs incurred by the lessee and is recorded
net of any lease incentives received. As the interest rates implicit in most of the leases are not readily determinable, the Company
uses the incremental borrowing rates based on the information available at lease commencement to determine the present value of the future
lease payments. Operating lease expenses are recognized on a straight-line basis over the term of the lease.

Bank
loans

Bank
loans are recognized initially at fair value, net of incidental fees. Incidental fees are recorded as a reduction of the proceeds received
and the related accretion is recorded as interest expense in the consolidated income statements over the estimated term of the facilities
using the effective interest method.

Commitments
and contingencies

In
the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business,
that cover a wide range of matters. Liabilities for the contingencies are recorded when it is probable that a liability has been incurred
and the amount of the liability can be reasonably estimated.

Certain
conditions may exist as of the