Company: THRM
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023344
Chunk: 38

Company: Gentherm Inc
Filing Date: 2025-02-19
Form: 10-K
Item: Item 16
Chunk 38
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 cash flows based on the substance of the underlying transactions, which are operating in nature. Bank notes held by the Company are classified as notes receivable within other current assets. The Company may hold such bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third-party financial institutions in exchange for cash.Inventory The Company’s inventory is measured at the lower of cost or net realizable value. Raw materials, components and consumables are measured using the weighted average cost method. Work-in-process and finished goods are measured using the first-in first-out method. If the net realizable value expected on the reporting date is below cost, a write-down is recorded to adjust inventory to its net 

 F-12

GENTHERM INCORPORATED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)  

realizable value. We recognize a reserve for obsolete and slow-moving inventories based on estimates of future sales and an inventory item’s capacity to be repurposed for a different use. We consider the number of months' supply on hand based on current planned requirements, uncommitted future projections and historical usage in estimating the inventory reserve.Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Expenditures for general repairs and maintenance are charged to expense as incurred. When property or equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts. Gains or losses from retirements and disposals are recorded as operating income or expense. Depreciation is computed using the straight-line method. The estimated useful lives of the Company’s property and equipment are as follows: 

          Asset Category
           
          Useful Life

          Buildings and improvements
           
          1 to 30 years

          Plant and equipment
           
          10 years

          Production tooling
           
          2 to 10 years

          Leasehold improvements
           
          Term of lease

          Information technology
           
          1 to 5 years
         
        The Company recognized depreciation expense of $45,503, $42,186 and $33,730 for the years ended December 31, 2024, 2023 and 2022, respectively. Tooling The Company incurs costs related to tooling used in the manufacture of products sold to its customers. In some cases, the Company enters into contracts with its customers whereby the Company incurs the costs to design