SAE Annual Report 2011 - 41

SAE INTERNATIONAL
Notes to the Financial Statements (Continued) Note 1 - Summary of Significant Accounting Policies (Continued) I. Property and Equipment

Property and equipment acquired is recorded at cost. Depreciation is provided by the straight-line method over the estimated useful lives of the assets. 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. J. 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, SAE compares the fair value of each reporting unit to the related net book value. If the fair value of a reporting unit exceeds its net book value, goodwill is not considered to be impaired. If the book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. SAE conducts its annual impairment testing in December each year. At December 31, 2011, SAE determined that the recorded value for goodwill was not impaired. K. Revenue Recognition Revenue is recognized when earned. Revenues received in advance of the year to which they relate, such as membership dues and meeting and conference attendance fees, are deferred and recognized over the periods to which the income relates. Magazines and publications revenue includes print advertising revenue; book, CD-ROM, and print sales; royalty revenue; and subscription revenue. Print advertising revenue is recognized when the advertisement is run. Book, CD-ROM and print sales are recognized when the products ship to the customer. Royalty revenues received under contract from a third party that sells SAE’s standards and related documents are recognized at the point of sale. Subscription revenue is recognized ratably over the term of the subscription.

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SAE Annual Report 2011

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