Form 10-K - Securities And Exchange Commission Page 27
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46funds are with one financial institution which has never experienced any
customer losses.
Inventories:
Inventories are valued at the lower of cost or market. Cost is determined
principally by the first-in, first-out method. The costs of finished
goods and work-in-process inventories include material, direct
engineering, manufacturing labor, and overhead components. The Company
periodically reviews the net realizable value of the inventory and, if
necessary, writes down the recorded costs.
Depreciation of Property, Plant and Equipment:
Property, plant and equipment are depreciated over their estimated useful
lives by the straight-line method for financial reporting purposes.
Accelerated depreciation methods are used for tax purposes. Upon sale or
retirement of property, plant and equipment, the costs and related
accumulated depreciation are eliminated from the accounts. Any resulting
gains or losses are included in the determination of net income.
Amortization of Goodwill:
The Company amortizes costs in excess of fair values of net assets of the
businesses acquired using the straight - line method over a period not to
exceed 20 years. The Company periodically reviews the value of its
goodwill to determine if an impairment has occurred.
Goodwill of $662 was recorded in fiscal 1999 for the Company's purchase
of ETC-PZL Aerospace Industries, SP. Z O.O. Amortization expense was $36
in fiscal 2000 and accumulated amortization as of February 25, 2000 was
$61.
Amortization of Capitalized Software Development Costs:
The Company capitalizes the qualifying costs of developing software
contained in certain products. Capitalization of costs requires that
technological feasibility has been established. When the software is
fully documented and tested, capitalization of development costs cease
and amortization commences over a period ranging from 36 to 60 months
(dependent upon the life of the product) on a straight-line basis which,
at a minimum, approximates estimated sales. Realization of capitalized
software costs is subject to the Company's ability to market the related
product in the future and generate cash flows to support future
operations. Capitalized software costs and related amortization totaled
$555 and $596, respectively, for the year ended February 25, 2000.
Capitalized software costs and related amortization totaled $581 and
$651, respectively, for the year ended February 26, 1999.
Amortization of Deferred Financing Costs:
Capitalized costs relating to the March, 1997 financing of the Company
are being amortized over the respective terms of each agreement.
Amortization expense relating to deferred financing costs was $331, $181
and $241 in 2000, 1999, and 1998, respectively (see note 7).
13
Notes to Consolidated Financial Statements
($ in thousands, except share data)
1.
Summary of Significant Accounting Policies (Continued):
Income Taxes:
The Company accounts for income taxes using the liability method, which
reflects the impact of temporary differences between values recorded for
assets and liabilities for financial reporting purposes and values
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