U-Haul 2016 Annual Report Download - page 27

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21
Continued increases in claim costs, including medical inflation and new treatments and medications
could lead to future adverse development resulting in additional reserve strengthening. Conversely,
settlement of existing claims or if injured workers return to work or expire prematurely, could lead to future
positive development.
Impairment of Investments
Investments are evaluated pursuant to guidance contained in ASC 320 - Investments - Debt and
Equity Securities to determine if and when a decline in market value below amortized cost is other-than-
temporary. Management makes certain assumptions or judgments in its assessment including but not
limited to: our ability and intent to hold the security, quoted market prices, dealer quotes or discounted
cash flows, industry factors, financial factors, and issuer specific information such as credit strength.
Other-than-temporary impairment in value is recognized in the current period operating results. There
were no write downs in fiscal 2016, 2015 and 2014, respectively.
Income Taxes
AMERCO files a consolidated tax return with all of its legal subsidiaries.
Our tax returns are periodically reviewed by various taxing authorities. The final outcome of these
audits may cause changes that could materially impact our financial results. Please see Note 13,
Provision for Taxes for more information.
Fair Values
Fair values of cash equivalents approximate carrying value due to the short period of time to maturity.
Fair values of short term investments, investments available-for-sale, long term investments, mortgage
loans and notes on real estate, and interest rate swap contracts are based on quoted market prices,
dealer quotes or discounted cash flows. Fair values of trade receivables approximate their recorded
value.
Our financial instruments that are exposed to concentrations of credit risk consist primarily of
temporary cash investments, trade receivables, reinsurance recoverables and notes receivable. Limited
credit risk exists on trade receivables due to the diversity of our customer base and their dispersion
across broad geographic markets. We place our temporary cash investments with financial institutions
and limit the amount of credit exposure to any one financial institution.
We have mortgage receivables, which potentially expose us to credit risk. The portfolio of notes is
principally collateralized by self-storage facilities and commercial properties. We have not experienced
any material losses related to the notes from individual or groups of notes in any particular industry or
geographic area. The estimated fair values were determined using the discounted cash flow method and
using interest rates currently offered for similar loans to borrowers with similar credit ratings.
The carrying amount of long term debt and short term borrowings are estimated to approximate fair
value as the actual interest rate is consistent with the rate estimated to be currently available for debt of
similar term and remaining maturity.
Other investments including short term investments are substantially current or bear reasonable
interest rates. As a result, the carrying values of these financial instruments approximate fair value.