Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 205

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 3
Chunk 205
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 under FASB ASC 830 “Foreign Currency
Matters”. The assets and liabilities of its PRC operations are translated into USD using the rate of exchange prevailing at the
balance sheet date. The capital accounts are translated at the historical rate. Adjustments resulting from the translation of the balance
sheets of the Company’s PRC subsidiaries are recorded in stockholders’ equity as part of accumulated other comprehensive income
(loss). The statement of comprehensive income (loss) is translated at average rate during the reporting period. Gains or losses resulting
from transactions in currencies other than the functional currencies are recognized in net loss for the reporting periods as part of general
and administrative expense. The statement of cash flows is translated at average rate during the reporting period, with the exception
of the consideration paid for the acquisition of business which is translated at historical rates.

(r)      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