Company: NGVC
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001437749-25-037556
Chunk: 377

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 3
Chunk 377
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 plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Assessment of indicators of impairment of long-lived assets

As discussed in Notes 2 and 7 to the consolidated financial statements, the Company assesses its long-lived assets for possible impairment at least annually, and whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company’s judgment regarding the identification of impairment indicators is based, in part, on operational performance at the store level. As of September 30, 2025, the Company’s long-lived assets included property and equipment, net, operating lease assets, net, and finance lease assets, net of $182.7 million, $259.6 million, and $42.9 million, respectively.

We identified the assessment of impairment triggering events related to certain long-lived assets, including property and equipment, operating lease assets, and finance lease assets, as a critical audit matter. A high degree of auditor judgment was required to evaluate the Company’s assessment of whether there were indicators of impairment, including significant changes in current performance combined with a history of losses and a projection of continuing losses, or a decision to close or relocate a store.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of