UNCONSOLIDATED AFFILIATES

12 Months Ended

Aug. 31, 2025

UNCONSOLIDATED AFFILIATES [Abstract]

The Company determines whether the joint venture in which it has made investments in is a Variable Interest Entity (“VIE”) at the start of each new venture and if a reconsideration event has occurred. At this time, the Company also considers whether it must consolidate a VIE and/or disclose information about its involvement in a VIE. A reporting entity must consolidate a VIE if that reporting entity has the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE.

In 2008, the Company entered into a real estate joint venture to jointly own and operate separate commercial retail centers adjacent to the warehouse club in Panama (GolfPark Plaza, S.A.). Due to the initial nature of the joint venture and the continued commitments for additional financing, the Company determined the joint venture is a VIE. Since all rights, obligations and the power to direct the activities of the VIE that most significantly impact the VIE's economic performance is shared equally by both parties within the joint venture, the Company has determined that it is not the primary beneficiary of the VIE and, therefore, has accounted for this entity under the equity method. Under the equity method, the Company's investments in unconsolidated affiliates are initially recorded as an investment in the stock of an investee at cost and are adjusted for the carrying amount of the investment to recognize the investor's share of the earnings or losses of the investee after the date of the initial investment.

On December 12, 2013, the Company entered into a lease agreement for approximately 17,976 square feet (1,670 square meters) of land with Golf Park Plaza, S.A. upon which the Company constructed its central offices in Panama. Construction of the offices was completed in October 2014. The lease term is for 15 years with three options to renew for five years each at the Company's discretion. On July 14, 2017, the Company entered into a lease agreement for approximately 2,992 square feet (278 square meters) of a building with Golf Park Plaza, S.A. for warehouse storage space. The agreement was renewed for an additional five years during fiscal year 2022. Combined, the Company recognized $140,000 in rent expense for each of the fiscal years ended August 31, 2025, August 31, 2024, and August 31, 2023.

The table below summarizes the Company’s interest in this VIE and the Company’s maximum exposure to loss as a result of its involvement with this VIE as of August 31, 2025 (in thousands):


Entity	% Ownership		Initial Investment		Additional Investments		Net Loss Inception to Date		Company’s Variable Interest in Entity		Commitment to Future Additional Investments (1)		Company's Maximum Exposure to Loss in Entity (2)
GolfPark Plaza, S.A.	50	%	$	4,616	$	2,402	$	(129)	$	6,889	$	99	$	6,988

(1) The parties intend to seek alternate financing for the project, which could reduce the amount of investments each party would be required to provide. The parties may mutually agree on changes to the project, which could increase or decrease the amount of contributions each party is required to provide.

(2) The maximum exposure is determined by adding the Company’s variable interest in the entity and any explicit or implicit arrangements that could require the Company to provide additional financial support.

The summarized financial information of the unconsolidated affiliates is as follows (in thousands):


	August 31, 2025		August 31, 2024
Current assets	$	1,858	$	1,641
Non-current assets	$	2,822	$	3,009
Current liabilities	$	168	$	151


	Years Ended August 31,
	2025		2024		2023
PriceSmart’s share of the net gain (loss) of unconsolidated affiliates	$	6	$	66	$	(55)