D. Accounts Receivable E. Long-Lived Assets, Depreciation and Amortization 45 expd 02 Note 1 The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. Property and equipment are recorded at cost and are depreciated or amortized on the straight-line method over the shorter of the assets’ estimated useful lives or lease terms. Useful lives for major categories of property and equipment are as follows: Expenditures for maintenance, repairs, and renewals of minor items are charged to earnings as incurred. Major renewals and improvements are capitalized. Upon dispo- sition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income for the period. In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets” effective for fiscal years beginning after December 15, 2001. Under the new rules, purchased goodwill and intangible assets with indefinite useful lives will no longer be amortized but will be subject to annual impairment tests in accordance with the provisions of the statements. The Company applied the new rules on accounting for goodwill and intangible assets beginning in the first quarter of 2002. Application of the non-amortization provisions of SFAS No. 142 did not have a material effect on the Company’s financial statements. Goodwill amortization expense was $161 during each of the years ended December 31, 2001 and 2000. The Company performed the required initial impairment test of goodwill as of January 1, 2002 and determined there was no impact on the consolidated earnings and financial position of the Company at that time. Effective January 1, 2002, the Company ceased to amortize goodwill. Goodwill is recorded net of accumulated amortization of $765 at December 31, 2002 and 2001. For the year ended December 31, 2002, the Company performed the required annual impair- ment test during the fourth quarter and determined that no impairment had occurred. Buildings 28 to 40 years Furniture, fixtures, equipment and purchased software 3 to 5 years Vehicles 3 to 5 years