Company: RSKD
Filing Date: 2025-03-06
Form Type: 20-F
Source: 0001851112-25-000006
Chunk: 207

Company: RISKIFIED LTD.
Filing Date: 2025-03-06
Form: 20-F
Item: Item 19
Chunk 207
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 transactions for legitimacy. Our Chargeback Guarantee merchants pay us a percentage of every dollar of the gross merchandise volume, or GMV, that we approve and guarantee on their behalf. Our fee, as determined by our risk-based pricing model, in these situations is a percentage of the GMV of our merchants’ orders that we approve, prior to taxes or other charges. These arrangements do not provide merchants with the right to take possession of our software platform. Rather, merchants are granted continuous access to our software platform under a hosting arrangement over the contractual period.

As noted above within “ Indemnification Guarantees”, our Chargeback Guarantee contracts with our merchants obligate us to stand ready to review and guarantee eCommerce transactions for legitimacy. In the event of a chargeback due to fraud, we indemnify merchants based on the GMV of the approved transaction. Our fee is allocated between the consideration for our stand ready review service performance obligation accounted for under ASC 606 and the consideration for issuing indemnification guarantees that are accounted for under ASC 460 and are recorded at fair value. Consideration allocated to our review service is recognized as revenue over the contract period in the month that the transactions are approved while consideration allocated to the indemnification guarantee is recognized as we are released from risk under the guarantee, generally over a six-month

We present revenue net of cancellations and adjustments for minimum service level agreements.

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised products. The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these products. To achieve the core principle of this standard, we applied the following five steps:

1. Identification of the contract, or contracts, with the merchant

We determine that we have a contract with a merchant when the contract is approved, each party’s rights and obligations regarding the products to be transferred can be identified, the payment terms for the products can be identified, we have determined the merchant has the ability and intent to pay, and the

F-14

RISKIFIED LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

contract has commercial substance. At contract inception, we evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. Contracts with our merchants are typically for a period of one year

2. Identification of the performance obligations in the contract

Performance obligations promised in a contract are identified based on the products that will be transferred to the merchant that are both