Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 374

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 6
Chunk 374
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 statements.
Additional information regarding our contractual obligations and commitments at December 31, 2024 is provided in the notes to our consolidated
financial statements.

44 

Material Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements
falling within the definition of Item 303(a) of Regulation S-K.

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements
are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), which requires us
to make judgments, estimates and assumptions. See “Note 1 – Nature of Business and Summary of Significant Accounting Policies,”
in Notes to the Consolidated Financial Statements, which is included in “Item 8. Financial Statements and Supplementary Data,”
which describes our significant accounting policies and methods used in the preparation of our Consolidated Financial Statements. The
methods, estimates and judgments that we use in applying our accounting policies require us to make difficult and subjective judgments,
often as a result of the need to make estimates regarding matters that are inherently uncertain.

Our most critical estimates include:

·allowance for doubtful accounts, which impacts revenue;

·the valuation of inventory, which impacts gross margins;

·impairment of long-lived assets;

·the valuation and recognition of share-based compensation, which impacts operating expenses; and

·the recognition and measurement of deferred income taxes, which impact our provision for taxes.

Allowance for Doubtful Accounts

We make estimates of the uncollectibility
of accounts receivable, especially analyzing accounts receivable and historical bad debts, customer concentrations, customer credit-worthiness,
current economic trends and changes in customer payment terms, when evaluating the adequacy of the allowance for doubtful accounts. Credit
evaluations are undertaken for all major sale transactions before shipment is authorized. On a quarterly basis, we evaluate aged items
in the accounts receivable aging report and provide an allowance in an amount we deem adequate for doubtful accounts. If management were
to make different judgments or utilize different estimates, material differences in the amount of our reported operating expenses could
result.

Inventory Valuation

Inventory is stated at the lower
of cost or market, with cost determined on a first-in first-out basis. The carrying value of inventory is reduced for estimated obsolescence
by the difference between its cost and the estimated market value based upon assumptions about future demand. We evaluate the inventory
carrying value for potential excess and obsolete inventory exposures by analyzing historical and anticipated demand. If actual future
demand or