Costs and estimated earnings in excess of billings on uncompleted  contracts also include certain costs associated with unapproved  change orders. These costs are included when the approval of  the change order is probable. Amounts are carried at the lower of  cost or net realizable value. Revenue is recognized to the extent of  costs incurred when recovery is probable. The amounts recorded  involve the use of judgments and estimates; thus, actual recoverable  amounts could differ from original assumptions.  In accordance with industry practice, assets and liabilities related to  costs and estimated earnings in excess of billings on uncompleted  contracts, as well as billings in excess of costs and estimated  earnings on uncompleted contracts, have been classified as current.  The contract cycle for certain long-term contracts may extend  beyond one year; thus, collection of amounts related to these  contracts may extend beyond one year. Inventories are stated at the lower of cost or market using weighted- average methods and include the cost of materials, labor and  manufacturing overhead. We use estimates in determining the  level of reserves required to state inventory at the lower of cost  or market. Our estimates are based on market activity levels,  production requirements, the physical condition of products and  technological innovation. Changes in any of these factors may result  in adjustments to the carrying value of inventory. Property, plant and equipment are stated at cost and are depreciated  using the straight-line method over the estimated useful lives of  the assets. Expenditures for repairs and maintenance are charged  to expense when incurred. Expenditures for major renewals and  improvements, which extend the useful lives of existing equipment,  are capitalized and depreciated. Upon retirement or disposition of  property, plant and equipment, the cost and related accumulated  depreciation are removed from the accounts, and any resulting gain  or loss is recognized in the Consolidated Statements of Operations. We review property, plant and equipment for impairment whenever  events or changes in circumstances indicate that the carrying value  may not be realizable. If an evaluation is required, the estimated  future undiscounted cash flows associated with the asset are  compared to the asset’s carrying amount to determine if an  impairment of such asset is necessary. This requires us to make  long-term forecasts of the future revenues and the costs related to  the assets subject to review. Forecasts require assumptions about  demand for our products and future market conditions. Estimating  future cash flows requires significant judgment and our projections  may vary from cash flows eventually realized. Future events and  unanticipated changes to assumptions could require a provision for  impairment in a future period. The effect of any impairment would  be reflected in income (loss) from operations in the Consolidated  Statements of Operations. In addition, we estimate the useful lives  of our property, plant and equipment and periodically review these  estimates to determine whether these lives are appropriate.  The costs of intangible assets with determinable useful lives are  amortized over their estimated useful lives. When certain events  or changes in operating conditions occur, the estimated future  undiscounted cash flows associated with the asset are compared  to the asset’s carrying amount to determine if an impairment of such  assets is necessary. For intangible assets that are amortized, we  review their estimated useful lives and evaluate whether events and  circumstances warrant a revision to the remaining useful life. For  additional information regarding our intangible assets and related  impairment, see Note D herein. Goodwill is evaluated for impairment annually, or immediately  if conditions indicate that impairment could exist. The evaluation  requires a two-step impairment test to identify potential goodwill  impairment and measure the amount of a goodwill impairment loss.  The first step of the test compares the fair value of a reporting unit  with its carrying amount, including goodwill. If the carrying amount  of a reporting unit exceeds its fair value, the second step of the  goodwill impairment test is performed to measure the amount of  the impairment loss. Both steps of the goodwill impairment testing  involve significant estimates. We account for income taxes under the asset and liability method,  based on the income tax laws and rates in the countries in which  operations are conducted and income is earned. This approach  requires the recognition of deferred tax assets and liabilities for the  expected future tax consequences of temporary differences between  the carrying amounts and the tax basis of assets and liabilities.  Developing our provision for income taxes requires significant  judgment and expertise in federal, international and state income  tax laws, regulations and strategies, including the determination of  deferred tax assets and liabilities and, if necessary, any valuation  allowances that may be required for deferred tax assets. We record  a valuation allowance to reduce our deferred tax assets to the  amount that is more likely than not to be realized. We believe that the  deferred tax asset recorded as of September 30, 2013, is realizable  through future reversals of existing taxable temporary differences  and future taxable income. If we were to subsequently determine  that we would be able to realize deferred tax assets in the future  in excess of our net recorded amount, an adjustment to deferred  tax assets would increase earnings for the period in which such  determination was made. We will continue to assess the adequacy  of the valuation allowance on a quarterly basis. Our judgments and  tax strategies are subject to audit by various taxing authorities. The objectives of accounting for income taxes are to recognize  the amount of taxes payable or refundable for the current year and  deferred tax liabilities and assets for the future tax consequences of  events that have been recognized in an entity’s financial statements  or tax returns. We recognize the tax benefit from an uncertain tax  position only if it is more likely than not that the tax position will  be sustained on examination by the taxing authorities, based on  29 Property, Plant and Equipment Income Taxes Inventories Goodwill Intangible Assets