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ValleyCrest Holding Co. and Subsidiaries <br />Notes to Consolidated Financial Statements (continued) <br />3. Summary of Significant Accounting Policies (continued) <br />Depreciation and Amortization <br />Depreciation and amortization of property and equipment (including golf courses) and <br />intangibles with estimated useful lives have been provided principally by use of the straight -line <br />method over the assets' economic lives or the related lease terms, whichever is shorter. Lives <br />used are generally as follows: <br />Building and improvements 5 to 33 years <br />Landscape equipment 3 to 5 years <br />Office equipment and furniture 5 to 7 years <br />Intangible assets 1 to 17 years <br />Goodwill <br />Goodwill represents the excess of costs over fair value of the assets acquired, including <br />intangible assets, and the liabilities assumed. Goodwill is not amortized, but instead tested for <br />impairment at least annually, in accordance with the provisions of FASB Statement No. 142, <br />Goodwill and Other Intangible Assets. <br />Goodwill is tested annually for impairment as of April 30 and is tested for impairment more <br />frequently if events and circumstances indicate that the asset might be impaired. An impairment <br />loss is recognized to the extent that the carrying amount exceeds the asset's fair value. This <br />determination is made at the reporting unit level and consists of two steps. First, the Company <br />determines the fair value of a reporting unit and compares it to its carrying amount. Second, if <br />the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized <br />for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value <br />of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of <br />the reporting unit in a manner similar to a purchase price allocation, in accordance with FASB <br />Statement No. 141, Business Combinations. The residual fair value after this allocation is the <br />implied fair value of the reporting unit goodwill. <br />VcileyCrest Landscape NWnt, <br />16400 NW 127th Ave. <br />t4lami, FL 33018-1051 <br />