Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 397

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 6
Chunk 397
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 FINANCIAL
STATEMENTS

DECEMBER 31, 2024

(Expressed in U.S. dollars)

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

As such, the Company uses the
“current rate method” to translate its PRC operations from RMB into USD, as required under FASB ASC 830 “Foreign Currency
Matters”. The assets and liabilities of its PRC operations are translated into USD using the rate of exchange prevailing at the
balance sheet date. The capital accounts are translated at the historical rate. Adjustments resulting from the translation of the balance
sheets of the Company’s PRC subsidiaries are recorded in stockholders’ equity as part of accumulated other comprehensive income
(loss). The statement of comprehensive income (loss) is translated at average rate during the reporting period. Gains or losses resulting
from transactions in currencies other than the functional currencies are recognized in net loss for the reporting periods as part of general
and administrative expense. The statement of cash flows is translated at average rate during the reporting period, with the exception
of the consideration paid for the acquisition of business which is translated at historical rates.

(r)      Revenue Recognition

Net revenue is net of discount
and value added tax and comprises the sale of bromine, crude salt and chemical products. Revenue is recognized at a point time when the
control of the promised goods is transferred to the customers in an amount that reflects the consideration that the Company expects to
receive from the customers in exchange for those goods. The acknowledgement of receipt of goods by the customers is when control of the
product is deemed to be transferred. Invoicing occurs upon acknowledgement of receipt of the goods by the customers. Customers have no
rights to return the goods upon acknowledgement of receipt of goods. Customers typically pay after the Company delivers and transfers
the products to them in accordance to terms set forth in their contract. Revenue from contracts with customers is disaggregated in Note
18.

(s)      Income Taxes

The Company accounts for income
taxes in accordance with the Income Taxes Topic of the FASB ASC, which requires the use of the liability method of accounting for deferred
income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences
between the tax basis of assets and liabilities and their reported amounts at each period end. Deferred tax assets and liabilities are
measured using tax rates that are