Company: MNTR
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010157
Chunk: 16

Company: Mentor Capital, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 16
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 is for a significant part of the remaining useful life of the asset or the present value of the lease payments
equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any
one of these criteria.

Our
discontinued operation’s operating leases were comprised of office space leases and office equipment. Costs associated
with operating lease assets were recognized on a straight-line basis over the term of the lease, within cost of goods sold for
vehicles used in direct servicing of our discontinued operation customers and in operating expenses for costs associated with all
other operating leases. Finance lease assets were amortized within the cost of goods sold for vehicles used in direct servicing of
our discontinued operation customers and within operating expenses for all other finance lease assets on a straight-line basis over
the shorter of the estimated useful lives of the assets or the lease term. The interest component of a finance lease was included in
interest expense and recognized using the effective interest method over the lease term. 

Property and equipment

Property and equipment are recorded at cost less accumulated
depreciation. Depreciation is computed using the declining balance method over the estimated useful lives of various classes of property.
The estimated lives of the property and equipment are generally as follows: computer equipment, 3 years to 5 years; furniture and equipment,
7 years; and vehicles and trailers, 4 years to 5 years. Depreciation on vehicles used by our discontinued operation to service its customers
is included in the cost of goods sold. All other depreciation is included in selling, general, and administrative costs in the consolidated
income statements.

Expenditures for major renewals and improvements are
capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred.
Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts, and any gain or loss is included
in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of
its property and equipment may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.”
When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining
whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future
cash flows is less than the carrying amount of those assets, the Company recognizes an impairment