Company: CHOW
Filing Date: 2025-09-02
Form Type: F-1/A
Source: 0001641172-25-026148
Chunk: 90

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-09-02
Form: F-1/A
Chunk 90
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 31, 2023, and 2024, we did not have any contracts with variable consideration, and no adjustments to the transaction price were necessary after initial recognition.

Principal versus Agent Considerations

In evaluating whether we are acting as a principal or an agent in its contracts, we considered the guidance in ASC 606-10-55-36 through 55-40. This evaluation focused on identifying the specified goods or services promised to the customer and assessing whether we obtain control of these goods or services before they are transferred to the customer.

Our IT solutions involve services, hardware, software, and IT application products. In these contracts, we provide a bundle of goods and services necessary to fulfil the performance obligations. While certain components of the solution, such as hardware and software, may be sourced from third-party providers, we direct and integrate these inputs into a cohesive IT solution that meets the customer’s needs.

Specifically:

(i) Control of Goods and Services:

We take control of the services, hardware, software, and IT application products prior to their delivery to the customer. This is evidenced by the Company’s ability to direct the use of these goods and services and to obtain the benefits from them before transfer.

We assume inventory risk for these goods, either upon receipt from the third-party provider or during their customization or bundling into the overall IT solution.

2. Primary Responsibility for Fulfilment:

We are responsible for ensuring the customer receives the specified solution, including resolving any issues with the delivery or functionality of the underlying services, hardware, software, and applications. This indicates that we are accountable for the overall performance of the arrangement.

3. Pricing Discretion:

We determine the pricing for the bundled solution, further supporting its role as principal.

Although we partner with cloud and technology service providers and outsources certain components to third-party providers, these third parties act as subcontractors or suppliers within our broader performance obligation. We do not merely arrange for the third parties to provide goods or services directly to the customer.

Based on the above, we concluded that we act as the principal in these transactions because we control the specified goods and services before transferring them to the customer.

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Accounts Receivable, Net

Accounts receivable primarily consists of amounts due from our customers and related companies. We record these balances net of an allowance for expected credit losses, which is established in accordance with ASC 326, Financial Instruments—Credit Losses.

We estimate our allowance for expected credit losses using a forward-looking model that incorporates historical loss experience, current conditions,