Company: INTG
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021858
Chunk: 8

Company: INTERGROUP CORP
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 8
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    $121,217,000  
    $9,550,000  
    $4,742,000  
    $18,784,000  
    $73,463,000 

Of
the amounts shown, Hotel-related mortgage and mezzanine balances are obligations of Portsmouth’s subsidiaries; InterGroup’s
parent-level mortgages relate to its non-Hotel real estate portfolio.

IMPACT
OF INFLATION 

Hotel
room rates are typically impacted by supply and demand factors, not inflation, since rental of a hotel room is usually for a limited
number of nights. Room rates can be, and usually are, adjusted to account for inflationary cost increases. Since Aimbridge has the power
and ability under the terms of its management agreement to adjust Hotel room rates on an ongoing basis, there should be minimal impact
on the Company’s revenues due to inflation. For the two most recent fiscal years, the impact of inflation on the Company’s
income is not viewed by management as material.

The
Company’s residential rental properties provide income from short-term operating leases, and no lease extends beyond one year.
Rental increases are expected to offset anticipated increased property operating expenses.

CRITICAL
ACCOUNTING POLICIES AND USE OF ESTIMATES

Critical
accounting policies are those that are most significant to the portrayal of our financial position and results of operations and require
judgments by management in order to make estimates about the effect of matters that are inherently uncertain. The preparation of these
Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts in our consolidated
financial statements. We evaluate our estimates on an ongoing basis, including those related to the consolidation of our subsidiaries,
recognition of our revenues, allowances for bad debts, accruals, asset impairments, other investments, income taxes and commitments and
contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The
actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions. There have been
no material changes to the Company’s critical accounting policies during the three months ended September 30, 2025.

INCOME
TAXES

We
apply ASC 740 to account for income taxes. Significant judgment is required to estimate the future tax consequences of events recognized
in our condensed consolidated