GENTEX CORP
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
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FY2024 · Filed Feb 25, 2025
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Gentex Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Gentex Corporation and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders' investment and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| Accounting for Technology Investments | |
| Description of the Matter | As discussed in Note 1 of the Company’s consolidated financial statements, the Company periodically makes strategic investments in the non-marketable debt or equity securities of non-consolidated third parties ("technology investments"). Depending on the form of investment, and the degree of influence the Company has over the investee, the Company primarily accounts for the technology investments in accordance with ASC 321, Investments - Equity Securities, or ASC 323, Investments – Equity Method and Joint Ventures. The application of the accounting model under ASC Topic 323 requires an enhanced amount of professional judgment by management, including the determination of the appropriate accounting guidance to utilize and periodic reassessment of the ability to exert significant influence over the investee, evaluation of changes in the value of the Company’s investments due to equity transactions by the investees, and the required financial statement disclosures. As of December 31, 2024, the Company has approximately $149.9 million and $6.0 million of technology investments recorded in long-term investments and short-term investments, respectively. |
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| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over technology investments. This included testing controls over the Company’s process to identify and evaluate agreements and determine the appropriate accounting guidance to apply, including management’s periodic reassessment of the ability to exert significant influence over the investee, evaluation of changes in the value of the Company’s investments due to equity transactions by the investees and testing controls related to the Company’s valuation of the technology investments. Our audit procedures included, among others, testing the completeness of material technology investments through inquiries with management, review of board and committee meeting minutes and inspection of rollforward investment schedules. We assessed the determination of accounting guidance through review of agreements and other supporting evidence. Furthermore, we performed valuation testing of the material technology investments based on the Company’s valuation approach and evaluated the adequacy of the disclosures in the financial statements in relation to technology investments. |
/s/Ernst & Young LLP
We have served as the Company’s auditor since 1999.
Grand Rapids, Michigan
February 25, 2025
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