Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 75

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 1B
Chunk 75
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 inventory exposures by analyzing historical and anticipated demand. If actual future
demand or market conditions are less favorable than those projected by management, additional inventory write-downs may be required in
the future, which could have a material adverse effect on our results of operations.

Depreciation of Property, Plant and Equipment

Property, plant and equipment
are stated at cost less accumulated depreciation and any impairment losses. Expenditures for new facilities or equipment, and major expenditures
for betterment of existing facilities or equipment are capitalized and depreciated using the straight-line method at rates sufficient
to depreciate such costs over the estimated productive lives. All other ordinary repair and maintenance costs are expensed as incurred.
Mineral rights are recorded at cost less accumulated depreciation and any impairment losses. Mineral rights are amortized ratably over
the term of the lease, or the equivalent term under the units of production method, whichever is shorter. In some situations, the life
of the asset may be extended or shortened if circumstances arise that would lead us to believe that the estimated life of the asset has
changed. The life of leasehold improvements may change based on the extension of lease contracts with our landlords. Changes in the estimated
lives of assets will result in an increase or decrease in the amount of depreciation recognized in future periods.

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Impairment of Long Lived Assets

We periodically evaluate whether
events or circumstances have occurred that indicate long-lived assets may not be recoverable or that the remaining useful life may warrant
revision. When such events or circumstances are present, we assess the recoverability of long- lived assets by determining whether the
carrying value will be recovered through the expected undiscounted future cash flows resulting from the use of the asset. In the event
the sum of the expected undiscounted future cash flows is less than the carrying value of the asset, an impairment loss equal to the excess
of the asset’s carrying value over its fair value is recorded.

Allowance on Deferred
Tax Assets

We evaluate our deferred income
tax assets to determine if valuation allowances are required or should be adjusted. A valuation allowance is established against our deferred
tax assets based on consideration of all available evidence, both positive and negative, using a “more likely than not” standard.
This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability,
the duration of statutory carry forward periods, our experience with expiring unused tax attributes and tax planning alternatives. In
making such judgments,