Audiovox 2008 Annual Report Download - page 64

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Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 29, 2008
(Dollars in thousands, except share and per share data)
The Company's estimates of excess and obsolete inventory may prove to be inaccurate, in which case the Company may
have understated or overstated the provision required for excess and obsolete inventory. Although the Company makes
every effort to ensure the accuracy of its forecasts of future product demand, any significant unanticipated changes in
demand, price or technological developments could have a significant impact on the value of the Company's inventory
and reported operating results.
i) Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Property under a capital lease is stated at
the present value of minimum lease payments. Major improvements are capitalized and minor replacements,
maintenance and repairs are charged to expense as incurred. Upon retirement or disposal of assets, the cost and related
accumulated depreciation are removed from the consolidated balance sheets.
A summary of property, plant and equipment, net, are as follows:
February 29, February 28,
2008 2007
Land $ 338 $ 338
Buildings 6,667 5,806
Property under capital lease 6,981 6,981
Furniture, fixtures and displays 3,049 2,457
Machinery and equipment 6,515 5,912
Construction-in-progress 26 48
Computer hardware and software 20,134 15,146
Automobiles 1,274 977
Leasehold improvements 5,898 5,136
50,882 42,801
Less accumulated depreciation and amortization 29,332 24,782
$ 21,550 $ 18,019
Depreciation is calculated on the straight-line method over the estimated useful lives of the assets as follows:
Buildings 20-30 years
Furniture, fixtures and displays 5-10 years
Machinery and equipment 5-10 years
Computer hardware and software 3-5 years
Automobiles 3 years
Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the asset. Assets
acquired under capital leases are amortized over the term of the respective lease. Capitalized computer software costs
obtained for internal use are amortized on a straight-line basis.
F-12
Source: AUDIOVOX CORP, 10-K, May 14, 2008