Papa Johns 1999 Annual Report Download - page 52

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Notes to Consolidated Financial Statements (continued)
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives
of the assets (generally five to ten years for restaurant, commissary and other equipment, and 20 to 40 years for buildings and
improvements). Leasehold improvements are amortized over the terms of the respective leases, including the first renewal period
(generally five to ten years).
Depreciation expense was $22.3 million in 1999, $18.4 million in 1998 and $13.9 million in 1997.
Intangible Assets
Intangible assets principally represents costs in excess of net assets of companies acquired (i.e., goodwill). Goodwill is amortized
on a straight-line basis ranging from 15 to 25 years. Accumulated amortization was $3.6 million at December 26, 1999 and
$2.6 million at December 27, 1998.
Impairment of Long-lived Assets
Long-lived and intangible assets are periodically reviewed for recoverability when impairment indicators are present. Recorded
values that are not expected to be recovered through undiscounted future cash flows are written down to current fair value which is
generally determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held
for sale).
Systems Development Costs
We defer certain systems development and related costs which meet established criteria. Amounts deferred are amortized over
periods not exceeding five years beginning in the month subsequent to completion of the related systems project. Total costs deferred
were approximately $1.4 million in 1999, $1.2 million in 1998, and $2.0 million in 1997. Unamortized deferred systems development
costs were $4.3 million at December 26, 1999 and December 27, 1998, and are reported in other assets in the accompanying
consolidated balance sheets.
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