Company: BSFC
Filing Date: 2025-07-15
Form Type: 10-Q
Source: 0001641172-25-019736
Chunk: 11

Company: Blue Star Foods Corp.
Filing Date: 2025-07-15
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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 revenue recognition for the arrangements that the Company determines are within the scope of Topic 606, the Company performs
the following five steps: (1) identify the contract(s) with a customer by receipt of purchase orders and confirmations sent by the Company
which includes a required line of credit approval process, (2) identify the performance obligations in the contract which includes shipment
of goods to the customer FOB shipping point or destination, (3) determine the transaction price which initiates with the purchase order
received from the customer and confirmation sent by the Company and will include discounts and allowances by customer if any, (4) allocate
the transaction price to the performance obligations in the contract which is the shipment of the goods to the customer and transaction
price determined in step 3 above and (5) recognize revenue when (or as) the entity satisfies a performance obligation which is when the
Company transfers control of the goods to the customers by shipment or delivery of the products.

The
Company elected an accounting policy to treat shipping and handling activities as fulfillment activities. Consideration payable to a
customer is recorded as a reduction of the arrangement’s transaction price, thereby reducing the amount of revenue recognized,
unless the payment is for distinct goods or services received from the customer.

Accounts
Receivable

Accounts
receivable consist of unsecured obligations due from customers under normal trade terms, usually net 30 days. The Company grants credit
to its customers based on the Company’s evaluation of a particular customer’s credit worthiness.

Allowances
for credit losses are maintained for potential credit losses based on the age of the accounts receivable and the results of the Company’s
periodic credit evaluations of its customers’ financial condition. Receivables are written off as uncollectible and deducted from
the allowance for doubtful accounts after collection efforts have been deemed to be unsuccessful. Subsequent recoveries are netted against
the allowance for credit losses. The Company generally does not charge interest on receivables.

Receivables
are net of estimated allowances for doubtful accounts and sales return, allowances and discounts. They are stated at estimated net realizable
value. As of March 31, 2025, the Company recorded allowances for sales returns, allowances and discounts of $30,000 and refund liability
of $23,500. There was no allowance for bad debt recorded for the three months ended March 31, 2025. As of December 31, 2024, the Company
recorded sales return, allowances and