Kodak 2015 Annual Report Download - page 70

(24) An adjustment of $220 million was recorded to increase the net book value of property, plant and equipment to estimated fair value. Fair value was
determined as follows:
• The market, sales comparison or trended cost approach was utilized for land, buildings and building improvements. This approach relies upon recent
sales, offerings of similar assets or a specific inflationary adjustment to original purchase price to arrive at a probable selling price.
• The cost approach was utilized for machinery and equipment. This approach considers the amount required to construct or purchase a new asset of
equal utility at current prices, with adjustments in value for physical deterioration, and functional and economic obsolescence. Physical deterioration is
an adjustment made in the cost approach to reflect the real operating age of an asset with regard to wear and tear, decay and deterioration that is not
prevented by maintenance. Functional obsolescence is the loss in value or usefulness of an asset caused by inefficiencies or inadequacies of the asset,
as compared to a more efficient or less costly replacement asset with newer technology. Economic obsolescence is the loss in value or usefulness of an
asset due to factors external to the asset, such as the economics of the industry, reduced demand, increased competition or similar factors.
The following table summarizes the components of property, plant and equipment, net as of August 31, 2013, and the fair value at September 1, 2013:
Successor Predecessor
(in millions)
As of September 1,
2013
As of August 31,
2013
Land $ 114 $ 35
Buildings and building improvements 180 189
Machinery and equipment 402 252
Construction in progress 31 31
Total $ 727 $ 507
For property, plant and equipment owned at September 1, 2013, the depreciable lives were revised to reflect the remaining estimated useful lives.
Refer to Note 1, “Basis of Presentation and Significant Accounting Policies” for additional information.
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