Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 494

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 7A
Chunk 494
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Revenue Recognition

Net revenue is net of discount
and value added tax and comprises the sale of bromine, crude salt and chemical products. Revenue is recognized at a point time when the
control of the promised goods is transferred to the customers in an amount that reflects the consideration that the Company expects to
receive from the customers in exchange for those goods. The acknowledgement of receipt of goods by the customers is when control of the
product is deemed to be transferred. Invoicing occurs upon acknowledgement of receipt of the goods by the customers. Customers have no
rights to return the goods upon acknowledgement of receipt of goods. Customers typically pay after the Company delivers and transfers
the products to them in accordance to terms set forth in their contract. Revenue from contracts with customers is disaggregated in Note
18.

(s)      Income Taxes

The Company accounts for income
taxes in accordance with the Income Taxes Topic of the FASB ASC, which requires the use of the liability method of accounting for deferred
income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences
between the tax basis of assets and liabilities and their reported amounts at each period end. Deferred tax assets and liabilities are
measured using tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected
to be realized or settled. The deferred income tax effects of a change in tax rates are recognized in the period of enactment. If it is
more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The guidance
also provides criteria for the recognition, measurement, presentation and disclosures of uncertain tax positions. A tax benefit from an
uncertain tax position may be recognized if it is “more likely than not” that the position is sustainable based solely on
its technical merits. Interests and penalties associated with unrecognized tax benefits are included within the (benefit from) provision
for income tax in the consolidated statement of comprehensive income (loss).

(t)      Exploration Costs

Exploration costs, which included
the cost of researching for appropriate places to drill wells and the cost of well drilling in search of potential natural brine or other
resources, are charged to the income statement as incurred. Once the commercial viability of a project has been confirmed, all subsequent
costs are capitalized.

    F-14 

GULF RESOURCES, INC.

AND SUBSIDIARIES