Company: BRID
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001493152-25-012266
Chunk: 54

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-08-22
Form: 10-Q
Item: Part I, Item 8
Chunk 54
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 primarily on historical utilization and
redemption rates. Estimates are reviewed regularly until incentives or product returns are realized and the result of any such adjustments
are known. Promotional allowances deducted from sales for the twelve weeks ended July 11, 2025, and July 12, 2024, were $4,297 and $4,489,
respectively. Promotional allowances deducted from sales for the thirty-six weeks ended July 11, 2025, and July 12, 2024, were $12,339
and $12,540, respectively.

Leases

Leases
are recognized in accordance with ASC Topic 842 Leases (“ASC 842”) which requires a lessee to recognize assets and
liabilities with lease terms of more than twelve months. We lease or rent property for operations such as storing inventory and
equipment. We analyze our agreements to evaluate whether or not a lease exists by determining what assets exist for which we control
usage for a period of time in exchange for consideration. In the event a lease exists, we classify it as a finance or operating
lease and record a right-of-use (“ROU”) asset and the corresponding lease liability at the inception of the lease. The
classification as a finance or operating lease determines whether the recognition, measurement and presentation of expenses and cash
flows are considered operating or financing. In the case of month-to-month lease or rental agreements with terms of twelve months or
less, we made an accounting policy election to not recognize lease assets and liabilities and instead record them on a straight-line
basis over the lease term.

The
storage units rented on a month-to-month basis for use by our Snack Food Products segment direct-store-delivery route system are not
costly to relocate and contain no significant leasehold improvements or degree of integration over leased assets. Orders can be fulfilled
by another route storage unit interchangeably. No specialized assets exist in the rental storage units. Market price is paid for storage
units. No guarantee of debt is made.

ROU
lease assets are recorded within property, plant and equipment, net of accumulated depreciation and amortization. The Company leases
warehouse space from time to time that is recorded as an ROU lease asset and corresponding lease liability. The Company no longer
leases long-haul trucks that were used by the Frozen Food Products segment. However, we have leased one refrigerated truck used in
the Frozen Food Products segment. Finance lease liabilities are recorded under other liabilities. The condensed consolidated balance
sheets reflect