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Depreciation is computed primarily using the straight-line method over the following ranges of useful lives:
Land improvements
Buildings and improvements
Machinery and equipment
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5 to 42 years
5 to 50 years
2 to 50 years
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Total depreciation expense for each fiscal period includes the charges to income that result from the amortization of assets recorded under capital leases.
As required by SFAS No. 144, “Accounting for the Impairment
or Disposal of Long-Lived Assets,” we review long-lived assets
for impairment when circumstances indicate that the carrying
value of an asset may not be recoverable. For assets that are to
be held and used, an impairment charge is recognized when
the estimated undiscounted future cash flows associated with
the asset or group of assets are less than their carrying value.
If impairment exists, an adjustment is made to write the asset
down to its fair value, and a loss is recorded for the difference
between the carrying value and the fair value. Fair values are
determined based on quoted market values, discounted cash
flows, internal appraisals or external appraisals, as applicable.
Assets to be disposed of are carried at the lower of their
carrying value or estimated net realizable value.
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Revenues are recognized when realized or realizable, and
when earned. In general, this is when title and risk of loss pass
to the customer. Further, revenues are realizable when we
have persuasive evidence of a sales arrangement, the product
has been shipped or the services have been provided to the
customer, the sales price is fixed or determinable, and
collectibility is reasonably assured. We reduce our revenues for
estimated customer returns and allowances, certain rebates,
sales incentives, and promotions in the same period the related
sales are recorded.
We also record revenues generated under long-term
construction-type contracts, mainly in connection with the
installation of specialized roofing and flooring systems, and
related services. In general, we account for long-term
construction-type contracts under the percentage-ofcompletion
method, and therefore record contract revenues
and related costs as our contracts progress. This method
recognizes the economic results of contract performance on
a timelier basis than does the completed-contract method;
however, application of this method requires reasonably
dependable estimates of progress toward completion, as well
as other dependable estimates. When reasonably dependable
estimates cannot be made, or if other factors make estimates
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