Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 491

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 7A
Chunk 491
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 accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the
related asset. To settle the liability, the obligation is paid, and to the extent there is a difference between the liability and the
amount of cash paid, a gain or loss upon settlement is recorded.

    F-11 

GULF RESOURCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

DECEMBER 31, 2024

(Expressed in U.S. dollars)

NOTE 1 – BASIS OF PRESENTATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

Currently, there are no reclamation
or abandonment obligations associated with the land being utilized for exploitation by the bromine and crude salt factories. Also, for
the two chemical plants that are to be relocated, currently, there are no obligations to restore the land to its original condition.

(l)      Recoverability of Long-lived Assets

In accordance with Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10-35”Impairment or
Disposal of Long-lived Assets”, long-lived assets to be held and used are analyzed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be fully recoverable or that the useful lives of those assets are
no longer appropriate. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible
impairment.

The Company determines the existence
of such impairment by measuring the expected future cash flows (undiscounted and without interest charges) and comparing such amount to
the carrying amount of the assets. An impairment loss, if one exists, is then measured as the amount by which the carrying amount of the
asset exceeds the discounted estimated future cash flows. Assets to be disposed of are reported at the lower of the carrying amount or
fair value of such assets less costs to sell. Asset impairment charges are recorded to reduce the carrying amount of the long-lived asset
that will be sold or disposed of to their estimated fair values. Charges for the asset impairment reduce the carrying amount of the long-lived
assets to their estimated salvage value in connection with the decision to dispose of such assets.

For the year ended December 31, 2024 and 2023, the Company
determined that the impairment of long-lived assets was $6,772,500