Company: REX
Filing Date: 2025-09-02
Form Type: 10-Q
Source: 0000930413-25-002856
Chunk: 65

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-09-02
Form: 10-Q
Item: Part I, Item 8
Chunk 65
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 aggregated into one reporting segment.

Note 2. Accounting Policies 

The interim consolidated financial statements
have been prepared in accordance with the accounting policies described in the notes to the consolidated financial statements included
in the Company’s fiscal year 2024 Annual Report on Form 10-K. While management believes that the procedures followed in the preparation
of interim financial information are reasonable, the accuracy of some estimated amounts is dependent upon facts that will exist
or calculations that will be accomplished at fiscal year-end.

9

Examples of such estimates include accrued liabilities, such as
management bonuses, and the provision for income taxes. Any adjustments pursuant to such estimates during the quarter were of a
normal recurring nature. Actual results could differ from those estimates.

Use of Estimates

The preparation
of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash
equivalents includes bank deposits as well as short-term, highly liquid investments with original maturities of three months or
less.

Revenue Recognition

The Company recognizes sales of ethanol,
distillers grains and distillers corn oil when obligations under the terms of the respective contracts with customers are satisfied;
this occurs with the transfer of control of products, generally upon shipment from the ethanol plant or upon loading of the rail
car used to transport the products.

Cost of Sales

Cost of sales includes depreciation, costs
of raw materials, third-party freight charges, purchasing and receiving costs, inspection costs, other distribution expenses, warehousing
costs, plant repair and maintenance costs, production labor and related payroll costs, and general facility overhead charges.

Selling, General and Administrative Expenses

The Company includes non-production related
costs such as professional fees, selling charges, operating lease expense, and certain payroll in SG&A expenses.

Financial Instruments

Certain of the forward corn and natural gas
purchase contracts and ethanol, distillers grains and distillers corn oil sale contracts are accounted for under the “normal
purchases and normal sales” scope exemption of ASC 815 because these arrangements are for purchases of corn that will be
delivered in quantities expected to be used by the Company and sales of ethanol, distillers grains and distillers corn oil in