AutoNation 2000 Annual Report Download - page 48

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2000 1999
----------- -----------
Land .................................................... $ 596.2 $ 529.7
Buildings and improvements .............................. 827.4 670.9
Furniture, fixtures and equipment ....................... 282.3 310.5
--------- ---------
1,705.9 1,511.1
Less: accumulated depreciation and amortization ......... (167.8) (150.7)
--------- ---------
$ 1,538.1 $ 1,360.4
========= =========
The Company continually evaluates whether events and circumstances have
occurred that may warrant revision of the estimated useful life of property and
equipment or whether the remaining balance
47
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (Continued)
of property and equipment should be evaluated for possible impairment. The
Company uses an estimate of the related undiscounted cash flows over the
remaining life of the property and equipment in assessing whether an asset has
been impaired. The Company measures impairment losses based upon the amount by
which the carrying amount of the asset exceeds the fair value. Fair values
generally are estimated using prices for similar assets and/or discounted cash
flows. As described in Note 10, Restructuring and Impairment Charges
(Recoveries), Net, the Company recognized an impairment charge in 1999 for the
write-down of certain megastore and other properties held for sale to fair
value. Properties held for sale are included in Other Assets as described
below.
Additionally, during 2000, the Company sold an office building which is
occupied by ANC Rental, resulting in proceeds of approximately $18.7 million
and a pre-tax gain of $2.3 million reflected in Other Income, Net in the
accompanying 2000 Consolidated Income Statement.
Intangible Assets
Intangible assets consist primarily of the cost of acquired businesses in
excess of the fair value of net assets acquired, including cost in excess of
the fair value of net assets not identified with specific acquired businesses,
or enterprise-level intangible assets. The cost in excess of the fair value of
net assets is amortized over forty years on a straight-line basis. Accumulated
amortization of intangible assets was $195.4 million and $122.5 million at
December 31, 2000 and 1999, respectively.
The Company continually evaluates whether events and circumstances have
occurred that may warrant revision of the estimated useful life of intangible
assets or whether the remaining balance of intangible assets should be
evaluated for possible impairment. The Company uses an estimate of the related
undiscounted cash flows over the remaining life of the intangible assets in
assessing whether intangible assets have been impaired. The Company measures
impairment losses based upon the amount by which the carrying amount of the
asset exceeds the fair value.
In September 2000, the FASB issued an Exposure Draft entitled "Business
Combinations and Intangible Assets" which was revised in February 2001. The
Exposure Draft, if adopted, would prohibit the pooling method of accounting for