Company: MGLD
Filing Date: 2025-09-19
Form Type: 10-K
Source: 0001493152-25-014286
Chunk: 535

Company: Marygold Companies, Inc.
Filing Date: 2025-09-19
Form: 10-K
Item: Item 4
Chunk 535
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 likely than not reduce the fair value of a reporting unit below its carrying value. These
events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators,
competition, or sale or disposition of a significant portion of a reporting unit. Application of the goodwill and other intangible assets
impairment test requires judgment in the determination of the fair value of each reporting unit. The fair value of each reporting unit
is estimated primarily through the use of a discounted cash flow methodology. This analysis requires significant judgments, including
estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business,
estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital. Changes in
these estimates and assumptions could materially affect the determination of fair value and impairment for each reporting unit.

Legal
and Other Contingencies

The
outcomes of legal proceedings and claims brought against us are subject to significant uncertainty. We evaluate developments in these
matters on a regular basis and a contingency loss is accrued by a charge to income when we believe it is both probable that a loss has
been incurred and the amount can be reasonably estimated. In determining whether a loss should be accrued, we evaluate among other factors
the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these
factors could materially impact our consolidated financial statements.

Income
Taxes

The
objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year, and deferred
tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements
or tax returns. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized
in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of
being realized upon ultimate settlement. Accounting literature also provides guidance on derecognition of income tax assets and liabilities,
classification of deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and
income tax disclosures. Judgment is required to assess the future tax consequences of events that have been recognized in our consolidated
financial statements or tax returns. Variations in the actual