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LEASE
 12 Months Ended
Dec. 31, 2024
Lease  
LEASE

20. LEASE

 

Lease commitments

 

The Company adopted ASC 842 for ASL’s office space lease and sales and training center as the lease commencement date upon the acquisition of ASL. The Company’s lease commitments are as follows:

 

On June 1, 2023, upon the expiry of the two-years lease for its office space, the Company entered into a new three-years lease with the same landlord who had earlier leased the same office space to the Company since April 1, 2020. The Company recognized lease liabilities of approximately $283,220, with a corresponding right-of-use (“ROU”) asset in the same amount based on the present value of the future minimum rental payments of the lease, using an effective interest rate of 5.5%, which was determined using the Company’s estimated incremental borrowing rate.

 

On September 1, 2023, upon the expiry of the two-years lease for its office space and sales training center, the Company entered into a new three-years lease with the same landlord who had earlier leased the same office space and sales training center to the Company since April 1, 2020. The Company recognized lease liabilities of approximately $126,093 with a corresponding right-of-use (“ROU”) asset in the same amount based on the present value of the future minimum rental payments of the lease, using an effective interest rate of 5.5%, which was determined using the Company’s estimated incremental borrowing rate.

 

On October 1, 2023, upon the expiry of the two-years lease for an apartment to serve as staff accommodation, the Company entered into a new two-years lease with the same landlord who had earlier leased the same apartment to the Company since October 1, 2021. The Company recognized lease liabilities of approximately $8,940 with a corresponding right-of-use (“ROU”) asset in the same amount based on the present value of the future minimum rental payments of the lease, using an effective interest rate of 5.5%, which was determined using the Company’s estimated incremental borrowing rate.

 

On December 18, 2023, the Company leased non-commercial vehicle as lessee under finance leases with 5 years lease terms. The Company recognized finance lease liabilities of approximately $78,824, using an effective interest rate of 8.63%, which was determined using the incremental borrowing rate.

 

On July 11, 2024, the Company leased non-commercial vehicle as lessee under finance leases with 5 years lease terms. The Company recognized finance lease liabilities of approximately $72,772, using an effective interest rate of 4.42%, which was determined using the incremental borrowing rate.

 

 

Components of leases 

As of

December 31, 2024

  

As of

December 31, 2023

 
         
Operating lease cost   155,828    157,370 
           
Amortization of finance lease asset  $29,445    13,094 
Interest on finance lease liabilities   7,267    275 
           
Weighted average remaining lease term (years)          
Operating lease   1.49    2.48 
Finance lease   4.34    5.00 
           
Weighted average discount rate          
Operating lease   5.5%   5.5%
Finance lease   6.7%   8.6%

 

The five-year maturity of the Company’s operating and finance lease liabilities is as follow:

 

Twelve Months Ending December 31, 2024  Operating lease liabilities   Finance lease liabilities 
         
2025  $158,800   $29,950 
2026   76,652    29,950 
2027   -    29,950 
2028   -    29,950 
Thereafter   -    42,623 
Total lease payments   235,452    162,422 
Less: interest   (9,657)   (25,436)
Present value of lease liabilities  $225,795   $136,985 

 

The Company also leased one office and operation center, and one shophouses with an expiring term of twelve months or less, which were classified as operation leases. Since the lease terms for these leases were twelve months or less, a lessee is permitted to elect not to recognize lease assets and liabilities. The Company has elected not to recognize lease assets and liabilities on these leases. As of December 31, 2024, the Company’s commitment for minimum lease payment under these operating leases within the next twelve months were $45,979.

 

Short term lease cost for the years ended December 31, 2024 and 2023 were $65,608 and $39,825 respectively.

 

 

AGAPE ATP CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”), except for number of shares)