Citrix 2014 Annual Report Download - page 77

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receivable, respectively. As of December 31, 2013, one distributor, Ingram Micro, accounted for 10% of gross accounts
receivable.
Inventory
Inventories are stated at the lower of cost or market on a standard cost basis, which approximates actual cost. The
Company’s inventories primarily consist of finished goods as of December 31, 2014 and 2013.
Property and Equipment
Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets, which is generally three years for computer equipment and software, the lesser of the lease term or ten
years for leasehold improvements, which is the estimated useful life, seven years for office equipment and furniture and the
Company’s enterprise resource planning system and 40 years for buildings.
During 2014 and 2013, the Company retired $11.4 million and $10.3 million, respectively, in property and equipment that
were no longer in use. At the time of retirement, the remaining net book value of these assets was not material and no material
asset retirement obligations were associated with them.
Property and equipment consist of the following:
December 31,
2014 2013
(In thousands)
Buildings $ 85,092 $ 85,092
Computer equipment 237,709 204,110
Software 392,009 316,902
Equipment and furniture 117,555 105,145
Leasehold improvements 211,625 168,990
1,043,990 880,239
Less accumulated depreciation and amortization (722,691)(597,268)
Assets under construction 18,893 28,438
Land 27,587 27,587
Total $ 367,779 $ 338,996
Long-Lived Assets
The Company reviews for impairment of long-lived assets and certain identifiable intangible assets to be held and used
whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable.
Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset
and its eventual disposition. Measurement of an impairment loss is based on the fair value of the asset compared to its carrying
value. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount
or fair value less costs to sell.
For the year ended December 31, 2014, the Company identified certain intangible assets that were impaired within our
Enterprise and Service Provider division and recorded non-cash impairment charges of $59.3 million. This non-recurring fair
value measurement was categorized as Level 3, as significant unobservable inputs were used in the valuation analysis. The
impairment charge is included in Amortization of product related intangible assets and Amortization of other intangible assets
in the accompanying consolidated statements of income. During 2013, the Company did not recognize any impairment charges
associated with its intangible assets. See Note 3 for more information regarding the Company's acquisitions and Note 5 for
more information regarding fair value measurements.
Goodwill
The Company accounts for goodwill in accordance with the authoritative guidance, which requires that goodwill and
certain intangible assets are not amortized, but are subject to an annual impairment test. There was no impairment of goodwill
or indefinite lived intangible assets as a result of the annual impairment tests analyses completed during the fourth quarters of
2014 and 2013, respectively. The authoritative guidance provides entities with an option to perform a qualitative assessment to
determine whether further quantitative impairment testing is necessary. The Company performed the qualitative assessment
when it performed its goodwill impairment test in the fourth quarter of 2014. As a result of the qualitative analysis, no further
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