BEC » Topics » Leases and Asset Retirement Obligations

These excerpts taken from the BEC 10-K filed Feb 23, 2009.

Leases and Asset Retirement Obligations

We account for our lease agreements as a lessee pursuant to SFAS 13, which requires that we categorize leases at their inception as either operating or capital leases depending on certain defined criteria. For certain lease agreements, we may receive rent holidays and other incentives. We recognize lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays that defer the commencement date of required payments. Additionally, incentives received are treated as a reduction of costs over the term of the agreement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the life of the lease, without assuming renewal features, if any, are exercised. In accordance with SFAS 143, “Accounting for Asset Retirement Obligations,” we establish assets and liabilities for the present value of estimated future costs to return certain of our leased facilities to their original condition. Such assets are depreciated over the lease period into operating expense and the recorded liabilities are accreted to the future value of the estimated restoration costs.

Leases and Asset Retirement Obligations

FACE="Times New Roman" SIZE="2">We account for our lease agreements as a lessee pursuant to SFAS 13, which requires that we categorize leases at their inception as either operating or capital leases depending on certain defined criteria. For
certain lease agreements, we may receive rent holidays and other incentives. We recognize lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays that defer the commencement date of required payments.
Additionally, incentives received are treated as a reduction of costs over the term of the agreement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the life of the lease, without
assuming renewal features, if any, are exercised. In accordance with SFAS 143, “Accounting for Asset Retirement Obligations,” we establish assets and liabilities for the present value of estimated future costs to return certain of our
leased facilities to their original condition. Such assets are depreciated over the lease period into operating expense and the recorded liabilities are accreted to the future value of the estimated restoration costs.

STYLE="margin-top:18px;margin-bottom:0px">Product Warranty Obligation

We record a liability
for product warranty obligations at the time of sale based upon historical warranty experience. The term of the warranty is generally twelve months. We also record an additional liability for specific warranty matters when they become known and are
reasonably estimable. Our product warranty obligations are included in accrued expenses in the accompanying consolidated balance sheets. Changes in product warranty obligations are as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 

















































































































   2008  2007  2006 

Beginning of year

  $12.5  $11.1  $11.7 

Current period warranty charges

   20.4   16.0   13.7 

Current period utilization

   (20.5)  (14.6)  (14.3)
             

End of year

  $12.4  $12.5  $11.1 
             
These excerpts taken from the BEC 10-K filed Feb 29, 2008.

Leases and Asset Retirement Obligations

We account for our lease agreements pursuant to SFAS 13, which requires that we categorize leases at their inception as either operating or capital leases depending on certain defined criteria. On certain of the lease agreements, we may receive rent holidays and other incentives. We recognize lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays that defer the commencement date of required payments. Additionally, incentives received are treated as a reduction of costs over the term of the agreement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the life of the lease, without assuming renewal features, if any, are exercised. In accordance with SFAS 143, “Accounting for Asset Retirement Obligations”, we establish assets and liabilities for the present value of estimated future costs to return certain of our leased facilities to their original condition. Such assets are depreciated over the lease period into operating expense and the recorded liabilities are accreted to the future value of the estimated restoration costs.

 

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Notes to Consolidated Financial Statements (Continued)

(tabular dollar amounts in millions, except amounts per share)

 

Leases and Asset Retirement Obligations

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">We account for our lease agreements pursuant to SFAS 13, which requires that we categorize leases at their inception as either operating or capital
leases depending on certain defined criteria. On certain of the lease agreements, we may receive rent holidays and other incentives. We recognize lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays
that defer the commencement date of required payments. Additionally, incentives received are treated as a reduction of costs over the term of the agreement. Leasehold improvements are capitalized at cost and amortized over the lesser of their
expected useful life or the life of the lease, without assuming renewal features, if any, are exercised. In accordance with SFAS 143, “Accounting for Asset Retirement Obligations”, we establish assets and liabilities for the present
value of estimated future costs to return certain of our leased facilities to their original condition. Such assets are depreciated over the lease period into operating expense and the recorded liabilities are accreted to the future value of the
estimated restoration costs.

 


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Table of Contents



Notes to Consolidated Financial Statements (Continued)

STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center">(tabular dollar amounts in millions, except amounts per share)

SIZE="1"> 


This excerpt taken from the BEC 10-K filed Feb 26, 2007.

Leases and Asset Retirement Obligations

The Company accounts for its lease agreements pursuant to SFAS No. 13, which categorizes leases at their inception as either operating or capital leases depending on certain defined criteria. On certain of the lease agreements, the Company may receive rent holidays and other incentives. The Company recognizes lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays that defer the commencement date of required payments. Additionally, incentives received are treated as a reduction of costs over the term of the agreement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the life of the lease, without assuming renewal features, if any, are exercised. In accordance with SFAS No. 143, “Accounting for Asset Retirement Obligations”, the Company establishes assets and liabilities for the present value of estimated future costs to return certain of its leased facilities to their original condition. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs.

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