Company: BSFC
Filing Date: 2025-07-15
Form Type: 10-Q
Source: 0001641172-25-019736
Chunk: 13

Company: Blue Star Foods Corp.
Filing Date: 2025-07-15
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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     (1,417,305)
  
    Inventory, net 
    $342,825  
    $447,760 

Lease
Accounting

The
Company accounts for its leases under ASC 842, Leases, which requires all leases to be reported on the balance sheet as right-of-use
assets and lease obligations. The Company elected the practical expedients permitted under the transition guidance that retained the
lease classification and initial direct costs for any leases that existed prior to adoption of the standard.

The
Company categorizes leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally
those leases that would allow the Company to substantially utilize or pay for the entire asset over its estimated life. Assets acquired
under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. The Company did
not have any finance leases as of March 31, 2025. The Company’s leases generally have terms that range from three years for equipment
and six6 to seven years for real property. The Company elected the accounting policy to include both the lease and non-lease components
of its agreements as a single component and accounts for them as a lease.

Lease
liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings
available to us. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives,
plus any direct costs from executing the lease. Lease assets are tested for impairment in the same manner as long-lived assets used in
operations. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term.

When
we have the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset,
and it is reasonably certain that we will exercise the option, we consider these options in determining the classification and measurement
of the lease. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the
term of the lease.

     11 

Long-lived
Assets

Management
reviews long-lived assets, including finite-lived intangible assets, for indicators of impairment whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the related assets are estimated over
the asset’s useful life on an undiscounted basis. If the evaluation indicates that the carrying value