Company: BRID
Filing Date: 2025-01-29
Form Type: 10-K
Source: 0001493152-25-004182
Chunk: 522

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-01-29
Form: 10-K
Item: Item 7
Chunk 522
---
 Allowances

Critical Audit Matter Description

As described in Note 1 to the consolidated financial
statements, contracts with customers often include some form of variable consideration in the form of discounts, trade allowances, consumer
incentives, coupons, volume-based incentives, cooperative advertising, product returns and other such programs. Promotional allowances
are treated as a reduction in revenue when the related revenue is recognized and are recorded at the estimated amount of credit expected
to be issued to customers, based primarily on historical utilization and redemption rates.

We identified the estimation of reserves for promotional
allowances by management as a critical audit matter because the inputs and assumptions utilized by management in estimating these reserves,
including consistency of historical data and contract pricing, require significant judgment and create a high degree of estimation uncertainty.
Consequently, auditing these assumptions requires subjective auditor judgment.

 24 

How We
Addressed the Matter in Our Audit

The primary
procedures we performed to address this critical audit matter included:

    ●
    Obtaining an understanding of management’s processes and controls over calculating the reserves for promotional allowances, including understanding relevant significant inputs and assumptions.

    ●
    Performing substantive analytical procedures surrounding the reserves for promotional allowances by performing an independent calculation of the allowance by using historical data and assumptions.

    ●
    Evaluating the reasonableness of key inputs and assumptions relevant to the reserve for promotional allowances, including contractual pricing and rebate arrangements with customers and historical allowance data, which were compared to source documents, and performed sensitivity analysis over key inputs and significant assumptions.

    ●
    Testing the accuracy, completeness, validity of the underlying data used in schedules calculating the reserve for promotional allowances.

    ●
    Considered transactions submitted by customers subsequent to year end.

    ●
    Review of applicable disclosures. 

We have served as the Company’s auditor
since 2009.

    /s/ Baker Tilly US, LLP

    Irvine, California

    January 29, 2025

 25 

BRIDGFORD FOODS CORPORATION 

CONSOLIDATED BALANCE SHEETS 

As of November 1, 2024, and November
3, 2023 

(in thousands, except share and per share amounts)

    November 1, 2024  
    November 3, 2023 
  
    ASSETS 

    Current assets: 

    Cash and cash equivalents 
    $10,230  
    $15,708 
  
    Accounts receivable, less allowance for doubtful