Company: ALCE
Filing Date: 2025-06-06
Form Type: 10-K
Source: 0001213900-25-052242
Chunk: 2437

Company: Alternus Clean Energy, Inc.
Filing Date: 2025-06-06
Form: 10-K
Item: Item 7A
Chunk 2437
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 estimated useful lives and reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The Company evaluates recoverability by comparing the carrying amount
of the asset group to the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the assets.
If the carrying amount of the asset group is not recoverable, an impairment loss is recognized equal to the amount by which the carrying
amount exceeds fair value, determined using discounted cash flows or other appropriate valuation techniques.

Goodwill Impairment

Goodwill represents the excess of the purchase price over the fair
value of net assets acquired in a business combination. The Company evaluates goodwill for impairment at least annually and whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is tested for impairment at the reporting
unit level by comparing the estimated fair value of the reporting unit to its carrying amount, including goodwill. If the carrying amount
exceeds the fair value, an impairment loss is recognized in an amount equal to the excess, limited to the carrying amount of goodwill.
The Company determines fair value using a combination of income and market approaches, as appropriate.

Income Taxes

Deferred taxes are determined
using the asset and liability method. Deferred tax assets are recognized for deductible temporary differences, operating loss, and tax
credit carry forwards. Deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax basis. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes
in tax laws and rates on the date of enactment.

F-18

The Company evaluated the
provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 prescribes
a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects
to take in its return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination
by taxing authorities. Differences between the positions taken or expected to be taken in a tax return and the benefit recognized and
measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized for an unrecognized
tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that