Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 496

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 7A
Chunk 496
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    Loss Contingencies

The Company accrues for loss contingencies
relating to legal matters, including litigation defense costs, claims and other contingent matters, including liquidated damage liabilities,
when such liabilities become probable and reasonably able to be estimated. Such estimates may be based on advice from third parties or
on management’s judgment, as appropriate. Revisions to accruals are reflected in income (loss) in the period in which different
facts or information become known or circumstances change that affect the Company’s previous assumptions with respect to the likelihood
or amount of loss. Amounts paid upon the ultimate resolution of such liabilities may be materially different from previous estimates.

(w)      Stock-based Compensation

The Company accounts for stock-based
compensation under the provisions of FASB ASC 718, Compensation Stock Compensation, which requires the measurement and recognition
of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The
Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of
the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method.
In June 2018, the FASB issued ASU No. 201807, Compensation - Stock Compensation (Topic 7I8), Improvements to Nonemployee
Share-Based Payment Accounting. The amendments in this Update expand the scope of Topic 718 to include share-based payment transactions
for acquiring goods and services from nonemployees. Prior to this Update, Topic 718 applied only to share-based transactions to employees.
Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the
scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good
has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments
have been satisfied. The Company has elected to account for the forfeiture of stock-based awards as they occur.

(x)      New Accounting Pronouncements

Recent accounting pronouncements adopted

In June 2016, the FASB
issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial
Instruments. The amendments in this Update affect loans, debt securities, trade receivables, and any other financial