Company: BRID
Filing Date: 2025-01-29
Form Type: 10-K
Source: 0001493152-25-004182
Chunk: 483

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-01-29
Form: 10-K
Item: Item 6
Chunk 483
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. The storage units rented on a month-to-month basis for use by our Snack Food Product segment direct store delivery
route system are not costly to relocate and contain no significant leasehold improvements or degree of integration over leased assets.
Orders can be fulfilled by another route storage unit interchangeably. No specialized assets exist in the rental storage units. Market
price is paid for storage units. No guarantee of debt is made.

Finance lease assets are recorded
within property, plant and equipment, net of accumulated depreciation and amortization. The Company’s leases of a box truck used
in its Frozen Food Products segment qualify as finance leases. Finance lease liabilities are recorded under other liabilities. Operating
leases are recorded as ROU assets under property, plant and equipment and the corresponding liability is recorded under other liabilities.
The consolidated balance sheets reflect both the current and long-term obligation. The classification as a finance or operating lease
determines whether the recognition, measurement and presentation of expenses and cash flows are considered operating or financing.

Life insurance policies

We record the cash surrender
value or contract value for life insurance policies as an adjustment of premiums paid in determining the expense or income to be recognized
under the contract for the period. The cash surrender value is included in other non-current assets in the accompanying Consolidated Balance
Sheets. Expected proceeds from life insurance are recorded under prepaid expenses and other current assets (refer to Note 2 – Composition
of Certain Financial Statement Captions).

Income taxes

Deferred taxes are provided
for items whose financial and tax bases differ. A valuation allowance is provided against deferred tax assets when it is expected that
it is more likely than not that the related asset will not be fully realized. The determination as to whether or not a deferred tax asset
can be fully realized is subject to a significant degree of judgment, based at least partially upon a projection of future taxable income,
which takes into consideration past and future trends in profitability, customer demand, supply costs, and multiple other factors, which
are inherently difficult to predict.

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We provide tax accruals for
federal, state, and local exposures relating to audit results, tax planning initiatives and compliance responsibilities. The development
of these accruals requires judgments about tax issues, potential outcomes, and timing. (See Note 4 for further information). Although
the outcome of these tax audits is uncertain, in management’s opinion adequate provisions for income taxes have been made for potential
liabilities emanating from these reviews. If actual outcomes differ materially from