H.X.C.(SZ:000936) Zheng Quan Zhi Xing·2025-07-21 16:27Company Overview - Source Photonics Holdings (Cayman) Limited was established on November 17, 2010, in the Cayman Islands with a registered capital of $50,000 [1] - The company is primarily engaged in the research, development, production, and sales of optical chips, optical components, and optical modules, mainly used in data centers and telecommunications [1] Financial Reporting Basis - The financial statements are prepared in accordance with the accounting standards issued by the Ministry of Finance, based on the going concern principle [1] - The accounting period follows the calendar year, from January 1 to December 31, with the current reporting period defined as the first quarter of 2025 [1] Accounting Policies - The company capitalizes R&D expenses and recognizes revenue based on specific conditions tailored to its operational characteristics [1] - Significant accounting policies include the treatment of construction in progress, investment activities, and capitalized R&D projects, with a threshold of RMB 5 million for materiality [1] Consolidation and Mergers - For mergers under common control, the assets and liabilities of the acquired entity are measured at their book value on the merger date [2] - Non-common control mergers recognize the acquisition cost at fair value, with any excess over the identifiable net assets recognized as goodwill [2] Financial Instruments - Financial assets are classified at initial recognition based on the business model and cash flow characteristics, including those measured at amortized cost and fair value [9][10] - The company assesses expected credit losses based on historical data, current conditions, and forecasts of future economic conditions [18][19] Currency and Foreign Operations - The company operates in multiple currencies, with the reporting currency being USD, while subsidiaries may use RMB or TWD based on their operational environments [1] - Foreign currency transactions are translated at the exchange rate on the transaction date, with monetary items at the balance sheet date rate [7][8] Inventory Management - Inventory is classified into raw materials, work in progress, and finished goods, with valuation based on actual cost [29] - The company uses a perpetual inventory system and assesses inventory for impairment when the net realizable value is lower than cost [30] Long-term Investments - Long-term equity investments are accounted for using the cost method for subsidiaries and the equity method for associates and joint ventures [31] - The initial investment cost for mergers is based on the book value of the acquired entity's net assets or the fair value of consideration paid [31]