Company: GURE
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001193805-25-000638
Chunk: 6

Company: GULF RESOURCES, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 6
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analyzing accounts receivable and historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and
changes in customer payment terms, when evaluating the adequacy of the allowance for doubtful accounts. Credit evaluations are undertaken
for all major sale transactions before shipment is authorized. On a quarterly basis, we evaluate aged items in the accounts receivable
aging report and provide an allowance in an amount we deem adequate for doubtful accounts. If management were to make different judgments
or utilize different estimates, material differences in the amount of our reported operating expenses could result.

(f) Concentration
of Credit Risk

The Company is exposed to credit risk in the normal
course of business, primarily related to accounts receivable and cash and cash equivalents. Substantially all of the Company’s cash
and cash equivalents are maintained with financial institutions in the PRC, namely, Industrial and Commercial Bank of China Limited, China
Merchants Bank Company Limited and Sichuan Rural Credit Union, which are not insured or otherwise protected. The Company placed $8,523,045and $10,075,162with these institutions as of March 31, 2025 and December 31, 2024, respectively. The Company has not experienced
any losses in such accounts in the PRC.

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

(g) Property,
Plant and Equipment

Property, plant and equipment are stated at cost
less accumulated depreciation and any impairment losses. Expenditures for new facilities or equipment, and major expenditures for betterment
of existing facilities or equipment are capitalized and depreciated using the straight-line method at rates sufficient to depreciate such
costs less 5% residual value over the estimated productive lives. All other ordinary repair and maintenance costs are expensed as incurred.

Mineral rights are recorded at cost less accumulated
depreciation and any impairment losses. Mineral rights are amortized ratably over the term of the lease, or the equivalent term under
the units of production method, whichever is shorter.

Construction in process primarily represents direct
costs of construction of property, plant and equipment. Costs incurred are capitalized and transferred to property, plant and equipment
upon completion and depreciation will commence when the completed assets are placed in service.

The Company’s depreciation and amortization
policies on property, plant and equipment, other than mineral rights and construction in process, are as follows:

Basis of Presentation and Summary of
Sign