Company: BRID
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0001493152-25-009592
Chunk: 79

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-03-07
Form: 10-Q
Item: Part I, Item 2
Chunk 79
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 Consolidated Financial Statements in conformity with generally accepted accounting principles in the United
States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during
the respective reporting periods. Some of the estimates needed to be made by management include the allowance for doubtful accounts,
promotional and returns allowances, inventory reserves, the estimated useful lives of property and equipment, and the valuation allowance
for the Company’s deferred tax assets. Actual results could materially differ from these estimates. We determine the amounts to
record based on historical experience and various other assumptions that we view as reasonable under the circumstances and consider all
relevant available information. The results of this analysis form the basis for our conclusion as to the value of assets and liabilities
that are not readily available from other independent sources. Amounts estimated related to liabilities for self-insured workers’
compensation, employee healthcare and pension benefits are especially subject to inherent uncertainties and these estimated liabilities
may ultimately settle at amounts which vary from our current estimates.

Current
accounting principles require that our pension benefit obligation be measured using an internal rate of return (“IRR”) analysis
to be included in the discount rate selection process. The IRR calculation for the Retirement Plan for Employees of Bridgford Foods Corporation
is measured annually and based on the Citigroup Pension Discount Rate. The Citigroup Pension Discount Rate as of January 31, 2025, was
5.57% as compared to 5.16% as of November 1, 2024. The discount rate applied can significantly affect the value of the projected benefit
obligation as well as the net periodic benefit cost.

Our
credit risk is diversified across a broad range of customers and geographic regions. Losses due to credit risk have recently been immaterial.
The allowance for credit losses on accounts receivable is based on historical trends and current collection risk. We have significant
receivables with a couple of large, well-known customers which, although historically secure, could be subject to material risk should
these customers’ operations suddenly deteriorate. We monitor these customers closely to minimize the risk of loss.

We
record the cash surrender or contract value for life insurance policies as an adjustment of premiums paid in determining the expense
or income to be recognized under the contract for the period.

We
provide tax reserves for federal, state, local and international exposures relating to audit results, tax planning initiatives and compliance