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These excerpts taken from the NAV 8-K filed Aug 21, 2009. Property and equipment Property and equipment are recorded at cost (or at fair value at the date of the contribution for contributed assets) and depreciated over their estimated useful lives using the straight-line method. These assets are being depreciated over estimated useful lives ranging from three to five years. Property and equipment Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. These assets were depreciated over estimated useful lives ranging from three to five years. This excerpt taken from the NAV 10-K filed Mar 31, 2009. Property and equipment Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. These assets were depreciated over estimated useful lives ranging from three to five years. This excerpt taken from the NAV 10-K filed Dec 30, 2008. Property and Equipment We report land, buildings, leasehold improvements, machinery and equipment, including tooling and pattern equipment, and furniture, fixtures, and equipment at cost, net of depreciation. We report assets under capital lease obligations at the lower of their fair value or the present value of the aggregate future minimum lease payments as of the beginning of the lease term. We depreciate our assets using the straight-line method over the shorter of the lease term or the estimated useful lives of the assets. The ranges of estimated useful lives are as follows:
The carrying amounts of all long-lived assets are evaluated periodically to determine if adjustment to the depreciation and amortization period or to the unamortized balance is warranted. Such evaluation is based principally on the expected utilization of the long-lived assets.
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Table of ContentsNavistar International Corporation Notes to Consolidated Financial Statements (Continued)
We depreciate trucks, tractors, and trailers leased to customers under operating lease agreements on a straight-line basis over the lease term, from one to eight years, to the equipment’s estimated residual value. The residual values of the equipment represent estimates of the value of the assets at the end of the lease contracts and are initially recorded based on estimates of future market values. Realization of the residual values is dependent on our future ability to market the equipment. We review residual values periodically to determine that recorded amounts are appropriate and the equipment has not been impaired. Maintenance and repairs of property and equipment are expensed as incurred. We capitalize replacements and improvements that increase the estimated useful life or productive capacity of an asset and we capitalize interest on major construction and development projects while in progress. Gains or losses on disposition of property and equipment are recognized in Other (income) expenses, net. We test for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset or asset group (hereinafter referred to as “asset group”) may not be recoverable by comparing the sum of the estimated undiscounted future cash flows expected to result from the operation of the asset group and its eventual disposition to the carrying value. If the sum of the undiscounted future cash flows is less than the carrying value, the fair value of the asset group is determined. The amount of impairment is calculated by subtracting the fair value of the asset group from the carrying value of the asset group. These excerpts taken from the NAV 10-K filed May 29, 2008. Property and equipment Property and equipment are recorded at cost (or at fair value at the date of the contribution for contributed assets) and depreciated over their estimated useful lives using the straight-line method. These assets are being depreciated over estimated useful lives ranging from three to five years. Property and Equipment We report land, buildings, leasehold improvements, and machinery and equipment, including tooling and pattern equipment, at cost, net of depreciation and asset impairments, if applicable. We report assets under capital lease obligations at the lower of their fair value or the present value of the aggregate future minimum lease payments as of the beginning of the lease term. We depreciate our assets using the straight-line method over the shorter of the lease term or the estimated useful lives of the assets. The ranges of estimated useful lives are as follows:
The carrying amounts of all long-lived assets are evaluated periodically to determine if adjustment to the depreciation and amortization period or to the unamortized balance is warranted. Such evaluation is based principally on the expected utilization of the long-lived assets. We depreciate trucks, tractors, and trailers leased to customers under operating lease agreements on a straight-line basis over the lease term, from one to eight years, to the equipment’s estimated residual value. The residual values of the equipment represent estimates of the value of the assets at the end of the lease contracts and are initially recorded based on estimates of future market values. Realization of the residual values is dependent on our future ability to market the equipment. We review residual values periodically to determine that recorded amounts are appropriate and the equipment has not been impaired. Maintenance and repairs of property and equipment are expensed as incurred. We capitalize replacements and improvements that increase the estimated useful life or productive capacity of an asset and we capitalize interest on major construction and development projects while in progress. Upon sale, retirement, or disposal of property and equipment, the asset cost and related accumulated depreciation balances are removed from the respective accounts, and the resulting net amount, less any proceeds, is recognized as a gain or loss in Other (income) expenses, net. We test for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset or asset group (hereinafter referred to as “asset group”) may not be recoverable by comparing the sum of the estimated undiscounted future cash flows expected to result from the operation of the asset group and its eventual disposition to the carrying value. If the sum of the undiscounted future cash flows is less than the carrying value, an impairment charge is recorded in Other (income) expenses, net. The amount of impairment is calculated by subtracting the fair value of the asset group from the carrying value of the asset group. This excerpt taken from the NAV 8-K filed Mar 6, 2008. Property
and Equipment
We report land, buildings, leasehold improvements, and machinery
and equipment, including tooling and pattern equipment, at cost,
net of depreciation and asset impairments, if applicable. We
report assets under capital lease obligations at the lower of
their fair value or the present value of the aggregate future
minimum lease payments as of the beginning of the lease term. We
depreciate our assets using the straight-line method over the
shorter of the lease term or the estimated useful lives of the
assets. The ranges of estimated useful lives are as follows:
Table of Contents
Navistar
International Corporation
Notes to
Consolidated Financial Statements (Continued)
The carrying amounts of all long-lived assets are evaluated
periodically to determine if adjustment to the depreciation and
amortization period or to the unamortized balance is warranted.
Such evaluation is based principally on the expected utilization
of the long-lived assets.
We depreciate trucks, tractors, and trailers leased to customers
under operating lease agreements on a straight-line basis over
the lease term, from one to eight years, to the equipment’s
estimated residual value. The residual values of the equipment
represent estimates of the value of the assets at the end of the
lease contracts and are initially recorded based on estimates of
future market values. Realization of the residual values is
dependent on our future ability to market the equipment. We
review residual values periodically to determine that recorded
amounts are appropriate and the equipment has not been impaired.
Maintenance and repairs of property and equipment are expensed
as incurred. We capitalize replacements and improvements that
increase the estimated useful life of an asset and we capitalize
interest on major construction and development projects while in
progress.
Upon sale, retirement, or disposal of property and equipment,
the asset cost and related accumulated depreciation balances are
removed from the respective accounts, and the resulting net
amount, less any proceeds, is recognized as a gain or loss in
Other (income) expenses, net.
We test for impairment of long-lived assets whenever events or
changes in circumstances indicate that the carrying value of an
asset or asset group (hereinafter referred to as “asset
group”) may not be recoverable by comparing the sum of the
estimated undiscounted future cash flows expected to result from
the operation of the asset group and its eventual disposition to
the carrying value. If the sum of the undiscounted future cash
flows is less than the carrying value, an impairment charge is
recorded in Other (income) expenses, net. The amount of
impairment is calculated by subtracting the fair value of the
asset group from the carrying value of the asset group.
This excerpt taken from the NAV 10-K filed Dec 10, 2007. Property
and Equipment
Depreciation
Methods
At the beginning of 2002, we changed our depreciation method for
all non-production assets acquired after October 31, 2001,
from straight-line half- year (“SL Half-year”)
convention to the straight-line modified half-year (“SL
Modified Half-year”) convention. Under the SL Half-year
convention, we recognized a half year of depreciation expense on
all assets placed in service any time during the year,
regardless of the month we placed the assets into service. Under
the SL Modified Half-year convention, we recognized a full year
of depreciation on all assets placed into service any time
during the first half of the year and we recognized no
depreciation on assets placed into service any time during the
second half of the year. Neither of these depreciation
conventions were appropriate.
At the end of 2002, we changed our depreciation method for all
production assets acquired after October 31, 2001, from the
SL Modified Half-year convention, to an activity based method of
depreciation, the units of production (“UOP”)
convention. The preferability of changing depreciation methods
from SL Half-year to UOP convention was not supportable.
Therefore, we have now changed our depreciation method for all
production assets back to the straight-line method with a
convention to begin depreciation in the middle of the month when
an asset is placed in service.
Capitalized
Interest
We made errors relating to the calculation of capitalized
interest. These errors related to both the way in which we
developed the interest rate used for calculating capitalized
interest and the way in which we applied the rate to determine
the amount of interest to capitalize. As a result, we revised
the rate and recalculated the appropriate amount of interest to
capitalize.
Financial
Statement Impact
The primary impact on our consolidated balance sheet as of
October 31, 2004 to correct the errors related to Property
and Equipment was a decrease to Property and equipment, net
of $22 million as of October 31, 2004. We also
corrected the misclassification of certain depreciation expense
previously included in Other expense (income), net, by
reclassifying it to Selling, general and administrative
expense.
Table of Contents
Navistar
International Corporation
Notes to
Consolidated Financial Statements (Continued)
The impacts on our consolidated statements of operations to
correct the errors related to Property and Equipment are as
follows (in millions):
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