Notes to Consolidated Financial Statements  (continued) (z) Investment in Affiliate (3) Prepaid Expenses and Other Assets  (4) Property and Equipment  the exchange rate in effect at the balance sheet date, while revenues  and expenses are translated at average rates prevailing during the  years. Translation adjustments are reported in accumulated other  comprehensive income, a separate component of stockholders’  equity.  The Company holds a minority interest in Ridemakerz, LLC of  approximately 21%, which is accounted for under the equity method.  In 2009, the carrying value of this investment was reduced to $-0-.  No income or loss allocations, impairments or other charges related  to Ridemakerz were recorded in fiscal 2013 or 2011. In 2012, certain  investors exercised a put option on 1.25 million shares, requiring  an additional investment of $0.5 million, which was immediately  impaired and included in selling, general and administrative  expenses as a component of net loss before income taxes in the Retail  segment. Under the current agreements, the Company could, at its  discretion, own up to approximately 28% of fully diluted equity in  Ridemakerz. The Company has no further obligations relating to its  investment in Ridemakerz. Prepaid expenses and other current assets consist of the following (in thousands):  For 2013, 2012 and 2011, depreciation expense was $18.6 million, $20.4  million and $22.8 million, respectively.  In 2012, the Company made the decision to close a number of stores.  The Company considers a more likely than not assessment that an  individual location will close as a triggering event to review the  store asset group for recoverability. As a result of these reviews, it  was determined that certain stores would not be able to recover the  carrying value of store leasehold improvements through expected  undiscounted cash flows over the shortened remaining life of the  related assets. Accordingly, the carrying value of the assets was  reduced to fair value, calculated as the net present value of estimated  future cash flows for each asset group, and asset impairment  charges of $1.0 million and $0.9 million were recorded in fiscal 2013  and fiscal 2012, respectively, which are included in selling, general  and administrative expenses as a component of net loss before  income taxes in the Retail segment. Any remaining net book value  is depreciated over the shortened expected life. The inputs used to  determine the fair value of the assets are Level 3 fair value inputs as  defined by ASC section 820-10.  In 2012, the Company made the decision to close a number of stores.  The Company considers a more likely than not assessment that an  individual location will close as a triggering event to review the  store asset group for recoverability. As a result of these reviews, it  was determined that certain stores would not be able to recover the  carrying value of store leasehold improvements through expected  undiscounted cash flows over the shortened remaining life of the  related assets. Accordingly, the carrying value of the assets was  reduced to fair value, calculated as the net present value of estimated  future cash flows for each asset group, and asset impairment  charges of $1.0 million and $0.9 million were recorded in fiscal 2013  and fiscal 2012, respectively, which are included in selling, general  and administrative expenses as a component of net loss before  income taxes in the Retail segment. Any remaining net book value  is depreciated over the shortened expected life. The inputs used to  determine the fair value of the assets are Level 3 fair value inputs as  defined by ASC section 820-10.  Property and equipment consist of the following (in thousands): During 2013, the Company reviewed the operating performance and  forecasts of future performance for the stores in its Retail segment.  As a result of that review, it was determined that several stores would  not be able to recover the carrying value of certain store leasehold  improvements through expected undiscounted cash flows over the  remaining life of the related assets. Accordingly, the carrying value  of the assets was reduced to fair value, calculated as the net present  value of estimated future cash flows for each asset group, and asset  impairment charges of $0.1 million were recorded in the fourth  quarter of fiscal 2013, which are included in cost of merchandise sold  as a component of net loss before income taxes in the Retail segment.  The inputs used to determine the fair value of the assets are Level 3  fair value inputs as defined by ASC section 820-10. In the event that  we decide to close any or all of these stores in the future, we may  be required to record additional impairments, lease termination  charges, severance charges and other charges. The Company  recorded asset impairment charges of $1.4 million in the fourth  quarter of fiscal 2012 and $0.4 million in the fourth quarter of fiscal  2011.  2013 2012 Land $ 2,261  $ 2,261  Furniture and fixtures 39,723  40,516  Computer hardware 21,722  23,120  Building 14,970  14,970  Leasehold improvements 124,068  136,402  Computer software 42,276  40,943  Construction in progress 2,655  2,381  247,675  260,593  Less accumulated depreciation 177,512  189,134  $ 70,163  $ 71,459  2013 2012 Prepaid rent $ 4,608  $ 8,736  Prepaid income taxes 280  -  Other  6,659  5,480  $ 11,547  $ 14,216  2013 FORM 10-K 41 BUILD-A-BEAR WORKSHOP, INC. 