Company: REX
Filing Date: 2025-09-02
Form Type: 10-Q
Source: 0000930413-25-002856
Chunk: 67

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-09-02
Form: 10-Q
Item: Part I, Item 8
Chunk 67
---
 tax positions and the related potential
penalties and interest.

Inventory

Inventories
are carried at the lower of cost or net realizable value. Cost for all inventories is determined using the first-in, first-out
method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonable predictable costs
of completion, disposal, and transportation. Inventory includes direct production costs and certain overhead costs such as depreciation,
property taxes and utilities related to producing ethanol and related by-products. Inventory is permanently written down in instances
when cost exceeds estimated net realizable value; such write-downs are based primarily upon commodity prices as the market value
of inventory is often dependent upon changes in commodity prices. The Company did not record any inventory write-downs at
July 31, 2025. The Company recorded approximately $100,000 of inventory write-downs in cost of sales at January 31, 2025. Fluctuations
in the write-down of inventory generally relate to the levels and composition of such inventory and changes in commodity prices
at a given point in time.

11

The components of inventory are as follows as
of the dates presented (amounts in thousands):

    July
    31,  2025  
     
    January
    31, 2025

    Ethanol and other finished goods 
    $5,517  
     
    $4,923 

    Work in process 
     4,815  
     
     5,185 

    Corn and other raw materials 
     21,300  
     
     21,568 

    Total 
    $31,632  
     
    $31,676 

Property and Equipment 

Property and equipment is recorded at cost or
the fair value on the date of acquisition (for property and equipment acquired in a business combination). Depreciation is computed
using the straight-line method. Estimated useful lives are 15 to 40 years for buildings and improvements, and 3 to 40 years for
fixtures and equipment.

In accordance with ASC 360-10 “Impairment
or Disposal of Long-Lived Assets”, the carrying value of long-lived assets is assessed for recoverability by management
when changes in circumstances indicate that the carrying amount may not be recoverable. The Company did not identify any indicators
of impairment or record any impairment charges during the first six months of fiscal year 2025 or 202