Express 2012 Annual Report Download - page 47

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Description of Policy Judgments and Uncertainties
Effect if Actual Results Differ from
Assumptions
Intangible Assets
Intangible assets with indefinite lives,
primarily trade names, are reviewed
for impairment annually in the fourth
quarter and may be reviewed more
frequently if indicators of impairment
are present. The impairment review is
performed by assessing qualitative
factors to determine whether it is
more likely than not that the fair
value of the asset is less than its
carrying amount.
Our consideration of indefinite
lived intangible assets for
impairment requires judgments
surrounding future operating
performance, economic conditions,
and business plans, among other
factors.
There are inherent uncertanties
related to our qualitative
assessment and, if actual results
are not consistent with our
estimates or assumptions, we may
be exposed to impairment losses
that could be material.
Leasehold Improvements
Leasehold improvements are
reviewed for impairment if indicators
of impairment are present. The
impairment review is performed at
the store level by comparing the
carrying value of the asset to the
undiscounted cash flows derived
from the asset. If the undiscounted
cash flows of the asset are less than
the carrying value of the respective
asset, then the carrying value is
compared to the estimated fair value
as determined using the discounted
store cash flows, and a loss is
recognized for the difference.
Our analysis of leasehold
improvements for impairment
requires judgment surrounding
what the appropriate triggering
events should be. This judgment
can be affected by factors such as
future store results, real estate
demand, and economic conditions
that can be difficult to predict.
We have not made any material
changes in the triggering events
used to evaluate our leasehold
improvements for impairment over
the past 3 years.
We have no reason to believe that
there will be a material change in
the future estimates or assumptions
we use in this evaluation.
However, if we become aware of
additional triggering events or if
triggering events that we are not
currently using are added, there is
potential that additional stores
could be required to be tested for
impairment and could be impaired.
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