Company: BRID
Filing Date: 2025-06-02
Form Type: 10-Q
Source: 0001641172-25-013252
Chunk: 53

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-06-02
Form: 10-Q
Item: Part I, Item 8
Chunk 53
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 on historical utilization and
redemption rates. Estimates are reviewed regularly until incentives or product returns are realized and the result of any such adjustments
are known. Promotional allowances deducted from sales for the twelve weeks ended April 18, 2025, and April 19, 2024, were $4,219 and
$3,871, respectively. Promotional allowances deducted from sales for the twenty-four weeks ended April 18, 2025, and April 19, 2024,
were $8,042 and $8,051, respectively.

Leases

Leases
are recognized in accordance with ASC 842 Leases (“ASC 842”) which requires a lessee to recognize assets and liabilities
with lease terms of more than twelve months. We lease or rent property for operations such as storing inventory and equipment. We analyze
our agreements to evaluate whether or not a lease exists by determining what assets exist for which we control usage for a period of
time in exchange for consideration. In the event a lease exists, we classify it as a finance or operating lease and record a right-of-use
(“ROU”) asset and the corresponding lease liability at the inception of the lease. 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.
In the case of month-to-month lease or rental agreements with terms of twelve months or less, we made an accounting policy election to
not recognize lease assets and liabilities and record them on a straight-line basis over the lease term. The storage units rented on
a month-to-month basis for use by our Snack Food Products 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.

ROU
lease assets are recorded within property, plant and equipment, net of accumulated depreciation and amortization. The Company leases
warehouse space from time to time that is recorded as ROU lease assets and corresponding lease liabilities. The Company no longer leases
long-haul trucks that were used by the Frozen Food Products segment. However, we have leased one refrigerated truck used in the Frozen
Food Products segment. Finance lease liabilities are recorded under other liabilities. The condensed consolidated balance sheets reflect
both the current and long-term obligations