SAE Annual Report 2012 - 41

SAE INTERNATIONAL AND SUBSIDIARIES
Notes to the Consolidated Financial Statements (Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
J. Property and Equipment (Continued)
Maintenance and repairs which are not considered to extend the useful lives of assets
are charged to operations as incurred. Expenditures exceeding $5,000 for additions and
improvements are capitalized.
Upon sale or retirement, the cost of assets and related
allowances are removed from the accounts and any resulting gains or losses are included in
income (expense) for the year.
K. Intangible Assets
Intangible assets that are subject to amortization are reviewed for potential impairment
whenever events or circumstances indicate that carrying amounts may not be recoverable.
Indefinite-lived intangible assets not subject to amortization are tested for impairment at
least annually. In July 2012, the Financial Accounting Standards Board (FASB) issued
updated guidance on testing intangible assets for impairment. Under the amendments in
this update, the Organization has the option to first assess qualitative factors to determine
whether the existence of events and circumstances indicate that it is more likely than not
that the indefinite-lived intangible asset is impaired. If based on its qualitative assessment
the Organization concludes that it is more likely than not that the fair value of an indefinitelived
intangible asset is less than its carrying amount, quantitative impairment testing is
required. However, if the Organization concludes otherwise, quantitative impairment testing
is not required. The amendments are effective for annual and interim impairment
tests
performed for fiscal years beginning after September 15, 2012, with early adoption
permitted. The Organization adopted this guidance for the year ended December 31, 2012.
L. Goodwill
Goodwill is not amortized but is tested for impairment on at least an annual basis.
Impairment testing is required more frequently if impairment indicators arise. In conducting
its impairment testing, the Organization determines if qualitative or quantitative factors are
to be used to evaluate the potential impairment in the carrying value of the Organization's
goodwill.
having a likelihood of more than 50 percent. The Organization can choose to perform the
qualitative assessment on none, some or all of its reporting units. In
The more-likely-than-not threshold is defined as
addition,
the
Organization may bypass the qualitative assessment for any reporting unit in any period and
proceed directly to the quantitative goodwill impairment test, and then resume performing
the qualitative assessment in any subsequent period.
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In August 2011, the FASB issued updated guidance on testing goodwill for
impairment. Under the amendments in this update, the Organization has the option to not
calculate the fair value of a reporting unit unless the Organization determines, by use of
qualitative factors, that it is more likely than not that the fair value of the reporting unit's
goodwill is less than its carrying value.

SAE Annual Report 2012

Table of Contents for the Digital Edition of SAE Annual Report 2012