Company: SIF
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0000090168-25-000032
Chunk: 6

Company: SIFCO INDUSTRIES INC
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 6
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 the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values.

Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1 - Quoted market prices in active markets for identical assets or liabilities

Level 2 - Observable market based inputs or unobservable inputs that are corroborated by market data

Level 3 - Unobservable inputs that are not corroborated by market data

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The book value of cash equivalents, accounts receivable, and accounts payable are considered to be representative of their fair values because of their short maturities. The carrying value of debt is considered to approximate the fair value based on the borrowing rates currently available to us for loans with similar terms and maturities. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in goodwill, other intangible assets and long-lived assets impairment analysis, the valuation of acquired intangibles and in the valuation of assets held for sale. Goodwill and intangible assets are valued using Level 3 inputs. Defined benefit plans can be valued using Level 1, Level 2, Level 3 or a combination of Level 1, 2 and 3 inputs. Retirement Benefit Plans of the 2024 Annual Report for further discussion.

G. Employee Retention Credit

Under the Coronavirus Aid, Relief, and Economic Security Act (the “ CARES Act”), the Employee Retention Credit (“ ERC”) is a refundable payroll tax credit available to eligible businesses and tax-exempt organizations impacted by the COVID-19 pandemic. Businesses qualified if they experienced a full or partial government-ordered suspension of operations or a "significant" decline in gross receipts (defined as a decline of more than 50% in any 2020 quarter compared to 2019, and more than 20% in 2021).

The Company, having reasonably assured eligibility, submitted and received approval for ERC refunds. In the absence of specific U. S. GAAP guidance on accounting for such credits, the Company adopted International Accounting Standards (“ IAS”) 20 - Accounting for Government Grants and Disclosure of Government Assistance. Under IAS 20, the credit can be

presented as other income or as a reduction of related expense.

As of June 30,