Company: BOF
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004712
Chunk: 956

Company: BranchOut Food Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 3
Chunk 956
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of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue
as a going concern.

Note
3 – Summary of Significant Accounting Policies

Use
of Estimates

The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that may 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 amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Segment
Reporting

Under
ASC 280, Segment Reporting, operating segments are defined as components of an enterprise where discrete financial information
is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources
and in assessing performance. The Company has two components, consisting of its sales operations in the United States, and its production
operations in Peru. Therefore, the Company’s Chief Executive Officer, who is also the CODM, makes decisions and manages the Company’s
operations based on these two operating segments for the manufacture and distribution of its products.

Fair
Value of Financial Instruments

ASC
820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy for instruments measured at fair value that distinguishes
between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable
inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent
of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants
would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

    F-7

BRANCHOUT
                                            FOOD INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

ASC
820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions
in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

    -
    Level
    1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
  
    -
    Level
    2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that
    are observable for the