FASB ASC 820 uses a fair value hierarchy based on three broad  levels of valuation inputs as described below: Computer Software and Internal Product Development Costs.  We  capitalize certain costs in accordance with FASB ASC 350-40,  Internal-Use Software , FASB ASC 350-50,  Website Development  Costs , and FASB ASC 985,  Software . Internal product development  costs mainly consist of employee costs for developing new web- based products and certain major enhancements of existing products.  We amortize these costs on a straight-line basis over the estimated  economic life, which is generally three years. Business Combinations.  Over the past several years, we have  acquired companies that complement our business operations. For  each acquisition, we allocate the purchase price to the assets  acquired, liabilities assumed, and goodwill. For acquisitions com- pleted in 2010 and 2009, we follow FASB ASC 805,  Business  Combinations . We recognize and measure the fair value of the  acquired operation as a whole, and the assets acquired and liabil- ities assumed at their full fair values as of the date control is  obtained, regardless of the percentage ownership in the acquired  operation or how the acquisition was achieved. We expense direct  costs related to the business combination, such as advisory, account- ing, legal, valuation, and other professional fees, as incurred. We  recognize restructuring costs, including severance and relocation  for employees of the acquired entity, as post-combination expenses  unless the target entity meets the criteria of FASB ASC 420,  Exit or  Disposal Cost Obligations  on the acquisition date. Prior to January  1, 2009, we generally included acquisition-related costs and restruc- turing costs as part of the cost of the acquired business. We provide additional information about our investments that are  subject to valuation under FASB ASC 820 in Note 6 in these Notes  to our Consolidated Financial Statements. The Fair Value Option for Financial Assets and Financial Liabilities .  FASB ASC 825,  Financial Instruments , permits entities the option  to measure many financial instruments and certain other items at  fair value with changes in fair value recognized in earnings each  period. FASB ASC 825 allows the fair value option to be elected on  an instrument-by-instrument basis when the asset or liability is  initially recognized or when there’s an event that gives rise to a  new basis of accounting for that instrument. We do not apply this  fair value option to any of our eligible assets. Concentration of Credit Risk.  No single customer is large enough to  pose a significant credit risk to our operations or financial condition.  For the years ended December 31, 2010, 2009, and 2008, no single  customer represented 10% or more of our consolidated revenue. If  receivables from our customers become delinquent, we begin a  collections process. We maintain an allowance for doubtful accounts  based on our estimate of the probable losses of accounts receivable. As part of the purchase price allocation, we follow the requirements  of FASB ASC 740,  Income Taxes . This includes establishing deferred  tax assets or liabilities reflecting the difference between the values  assigned for financial statement purposes and values applicable  for income tax purposes. In certain acquisitions, the goodwill result- ing from the purchase price allocation may not be deductible for  income tax purposes. FASB ASC 740 prohibits recognition of a  deferred tax asset or liability for temporary differences in goodwill  if goodwill is not amortizable and deductible for tax purposes. Property, Equipment, and Depreciation.  We state property and equip- ment at historical cost, net of accumulated depreciation. We depre- ciate property and equipment primarily using the straight-line method  based on the useful life of the asset, which ranges from three to  seven years. We amortize leasehold improvements over the lease  term or their useful lives, whichever is shorter. Goodwill.  Changes in the carrying amount of our recorded goodwill  are mainly the result of business acquisitions. In accordance with  FASB ASC 350,  Intangibles—Goodwill and Other , we do not amor- tize goodwill; instead, goodwill is subject to an impairment test  annually, or whenever indicators of impairment exist. An impairment  would occur if the carrying amount of a reporting unit exceeded the  fair value of that reporting unit. Our reporting units are components  of our reportable segments. We performed annual impairment  reviews in the fourth quarter of 2010, 2009, and 2008. We did not  record any impairment losses in 2010, 2009, or 2008. Morningstar, Inc. 2010 Annual Report 109 U  Level 1: Valuations based on quoted prices in active markets  for identical assets or liabilities that the company has the ability  to access. U  Level 2: Valuations based on quoted prices in markets that are  not active or for which all significant inputs are observable, either  directly or indirectly. U  Level 3: Valuations based on inputs that are unobservable and  significant to the overall fair value measurement.