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PUBLIC STORAGE
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
F-13
name is unimpaired, we do not record an impairment charge and no further analysis is performed. Otherwise,
we record an impairment charge for any excess of carrying amount over quantitatively assessed fair value.
In evaluating goodwill for impairment, we first evaluate, based upon the relevant events and
circumstances and other such qualitative factors, whether the fair value of the reporting unit that the goodwill
pertains to is greater than its aggregate carrying amount. If based upon this evaluation it is more likely than not
that the fair value of the reporting unit is in excess of its aggregate carrying amount, no impairment charge is
recorded and no further analysis is performed. Otherwise, we estimate the goodwill’s implied fair value based
upon what would be allocated to goodwill if the reporting unit were acquired at estimated fair value in a
transaction accounted for as a business combination, and record an impairment charge for any excess of book
value over the goodwill’s implied fair value.
For our investments in unconsolidated real estate entities, if we determine that a decline in the
estimated fair value of the investments below carrying amount is other than temporary, we record an
impairment charge for any excess of carrying amount over the estimated fair value.
For our loan receivable, if we determine that it is probable we will be unable to collect all amounts due
based on the terms of the loan agreement, we record an impairment charge for any excess of book value over
the present value of expected future cash flows.
No impairments were recorded in any of our evaluations for any period presented herein.
Revenue and Expense Recognition
Rental income, which is generally earned pursuant to month-to-month leases for storage space, as well
as late charges and administrative fees, are recognized as earned. Promotional discounts reduce rental income
over the promotional period. Ancillary revenues and interest and other income are recognized when earned.
Equity in earnings of unconsolidated real estate entities represents our pro-rata share of the earnings of the
Unconsolidated Real Estate Entities.
We accrue for property tax expense based upon actual amounts billed and, in some circumstances,
estimates and historical trends when bills or assessments have not been received from the taxing authorities or
such bills and assessments are in dispute. If these estimates are incorrect, the timing and amount of expense
recognition could be incorrect. Cost of operations, general and administrative expense, interest expense, as well
as television and other advertising expenditures are expensed as incurred.
Foreign Currency Exchange Translation
The local currency (primarily the Euro) is the functional currency for our interests in foreign
operations. The related balance sheet amounts are translated into U.S. Dollars at the exchange rates at the
respective financial statement date, while amounts on our statements of income are translated at the average
exchange rates during the respective period. The Euro was translated at exchange rates of approximately 1.216
U.S. Dollars per Euro at December 31, 2014 (1.377 at December 31, 2013), and average exchange rates of
1.329, 1.328 and 1.285 for the years ended December 31, 2014, 2013 and 2012, respectively. Cumulative
translation adjustments, to the extent not included in cumulative net income, are included in equity as a
component of accumulated other comprehensive income (loss).