Adaptec 2002 Annual Report Download - page 54

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The components of property and equipment are as follows:
December 31,
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
(in thousands) 2002 2001
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Machinery and equipment $ 172,227 $ 172,735
Land 13,448 14,507
Leasehold improvements 11,765 13,176
Furniture and fixtures 15,305 13,971
Building − 701
Construction−in−progress 1,027 1,027
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
213,772 216,117
Less accumulated depreciation and amortization (162,583) (126,402)
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Total $ 51,189 $ 89,715
================================
In 2002, the Company recorded an impairment charge of $1.8 million for machinery
and equipment that was removed from service.
Goodwill and other intangible assets. Goodwill, developed technology and other intangible assets are carried
at cost less accumulated amortization, which had been computed on a straight−line basis over the economic
lives, ranging from three to seven years, of the respective assets.
In July 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standard No. 141 (SFAS 141), "Business Combinations" and Statement of Financial Accounting Standard No. 142
(SFAS 142), "Goodwill and Other Intangible Assets".
SFAS 141 requires that business combinations be accounted for under the purchase method of accounting and
addresses the initial recognition and measurement of assets acquired, including goodwill and intangibles,
and liabilities assumed in a business combination. The Company adopted SFAS 141 on a prospective basis
effective July 1, 2001. The adoption of SFAS 141 did not have a material effect on the Company's financial
statements, but will impact the accounting treatment of future acquisitions.
SFAS 142 requires goodwill to be allocated to, and assessed as part of, a reporting unit. In accordance with
SFAS 142, goodwill will no longer be amortized but instead will be subject to impairment tests at least
annually. In conjunction with the implementation of SFAS 142, the Company completed the transitional
impairment test as of the beginning of 2002 and determined that a transitional impairment charge would not
be required. The Company also completed its annual impairment test in December 2002 and determined that
there was no impairment of goodwill.
The Company adopted SFAS 142 on a prospective basis at the beginning of fiscal 2002 and stopped amortizing
goodwill totaling $7.1 million, thereby eliminating goodwill amortization of approximately $2.0 million in
2002. Net loss and net loss per share adjusted to exclude goodwill and workforce amortization for 2002, 2001
and 2000 are as follows:
53