Company: REX
Filing Date: 2025-12-04
Form Type: 10-Q
Source: 0000930413-25-003566
Chunk: 70

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-12-04
Form: 10-Q
Item: Part I, Item 8
Chunk 70
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. A discount rate of 6.9% was deemed appropriate as an incremental borrowing
rate for a 10-year term.

15

The following table is a summary of future
minimum rentals on the lease at October 31, 2025 (amounts in thousands):

    Years Ended January 31, 
    Minimum Rentals 

    Remainder of 2026 
    $117 

    2027 
     469 

    2028 
     469 

    2029 
     469 

    2030 
     469 

    Thereafter 
     2,463 

    Total 
     4,456 

    Less: present value discount 
     1,194 

    Finance lease liabilities 
    $3,262 

Note 5. Fair Value

The Company applies ASC 820, which provides
a framework for measuring fair value under accounting principles generally accepted in the United States of America. This accounting
standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit
price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date.

The Company determines the fair market values
of its financial instruments based on the fair value hierarchy established by ASC 820 which requires an entity to maximize the
use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels
of inputs that may be used to measure fair values which are provided below. The Company carries certain cash equivalents, investments,
and derivative instruments at fair value.

The fair values of derivative assets and
liabilities traded in the over-the-counter market are determined using quantitative models that require the use of multiple market
inputs including interest rates, prices and indices to generate pricing and volatility factors, which are used to value the position.
The predominance of market inputs are actively quoted and can be validated through external sources, including brokers, market
transactions and third-party pricing services. Estimation risk is greater for derivative asset and liability positions that are
either option-based or have longer maturity dates where observable market inputs are less readily available or are unobservable,
in which case interest rate, price or index scenarios are extrapolated in order to determine the fair value. The fair values of
derivative assets and liabilities include adjustments for market liquidity, counterparty credit quality, the Company’s own
credit standing and other