Company: MGLD
Filing Date: 2025-09-19
Form Type: 10-K
Source: 0001493152-25-014286
Chunk: 16

Company: Marygold Companies, Inc.
Filing Date: 2025-09-19
Form: 10-K
Item: Item 8
Chunk 16
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 provided. For our Brigadier subsidiary in Canada, the Company operates under contract with an alarm monitoring
company that pays a percentage of its recurring monitoring fee to Brigadier in exchange for continued customer service and support functions
with respect to each customer maintained under contract by the monitoring company. The Company has no costs of contracts which require
capitalization. The Company’s only contract assets are accounts receivable. The Company has no contract liabilities other than
deposits received periodically which are insignificant to the consolidated financial statements. The Company generates revenue, in part,
through contractual monthly recurring fees received for providing ongoing customer support services to monitoring company clientele.

The
five-step process governing contract revenue reporting includes:

1.
Identifying the contract(s) with customers

2.
Identifying the performance obligations in the contract

3.
Determining the transaction price

4.
Allocating the transaction price to the performance obligations in the contract

5.
Recognizing revenue when or as the performance obligation is satisfied

For
Brigadier, transactions involve security systems that are sold outright to the customer where the Company’s performance obligations
include customer support services and the sale and installation of the security systems. For such arrangements, the Company allocates
a portion of the transaction price to each performance obligation based on a relative stand-alone selling price. Revenue associated with
the sale and installation of security systems is recognized once installation is complete and is reflected as security system revenue
in the Consolidated Statements of Operations. Revenue associated with customer support services is recognized as those services are provided,
and is included as a component of security system revenue in the Consolidated Statements of Operations. None of the other subsidiaries
of the Company generate revenue from long-term contracts.

    F-11

Income
Taxes

Income
taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the
Company is able to realize their benefits or if future deductibility is uncertain