the lease term. In addition, certain of the Company’s leases contain  future contingent increases in rentals. Such increases in rental  expense are recorded in the period that it is probable that store sales  will meet or exceed the specified target that triggers contingent rental  expense.  represented the entire balance of the Company’s goodwill. There was  no tax-deductible goodwill as of December 28, 2013 and December  29, 2012. This does not change our long-term outlook for the UK  reporting unit. Other intangible assets consist primarily of initial costs related to  trademarks and other intellectual property. Trademarks and other  intellectual property represent third-party costs that are capitalized  and amortized over their estimated lives ranging from one to three  years using the straight-line method.  Other assets consist primarily of deferred leasing fees, deferred costs  related to franchise agreements and trade credits. Deferred leasing  fees are initial, direct costs related to the Company’s operating  leases and are amortized over the term of the related leases. Deferred  franchise costs are initial costs related to the Company’s franchise  agreements that are deferred and amortized over the life of the  respective franchise agreement. Amortization expense related to  other assets was $0.2 million, $0.3 million and $0.5 million for 2013,  2012 and 2011, respectively. See Note 6 – Other Non-current Assets for  further discussion regarding trade credits.  Whenever facts and circumstances indicate that the carrying value  of a long-lived asset may not be recoverable, the carrying value  is reviewed. If this review indicates that the carrying value of the  asset will not be recovered, as determined based on projected  undiscounted cash flows related to the asset over its remaining life,  the carrying value of the asset is reduced to its estimated fair value.  See Note 4 – Property and Equipment and Note 6 – Other Non-current  Assets for further discussion regarding the impairment of long-lived  assets.  The calculation of fair value requires multiple assumptions regarding  our future operations to determine future cash flows, including  but not limited to, sales volume, margin rates and discount rates. If  different assumptions were used in the analysis, it is possible that  the amount of the impairment charge may have been significantly  different than what was recorded.  Certain of the Company’s operating leases contain predetermined  fixed escalations of minimum rentals during the original lease terms.  For these leases, the Company recognizes the related rental expense  on a straight-line basis over the life of the lease and records the  difference between the amounts charged to operations and amounts  paid as deferred rent. The Company also receives certain lease  incentives in conjunction with entering into operating leases. These  lease incentives are recorded as deferred rent at the beginning of the  lease term and recognized as a reduction of rent expense over  Based on the assessment at the end of 2013, 2012 and 2011, the  deferred revenue liability was adjusted downward by $0.1 million,$0.5  million and $1.5 million, respectively, with corresponding increases  to net retail sales, and net loss was decreased by $0.1 million, $0.5  million and $1.5 million, respectively. For 2013, 2012 and 2011, historical rates for points converting into  awards and ultimate award redemption were applied to actual  points and awards outstanding at the respective balance sheet date  to calculate the liability and corresponding adjustment to net retail  sales. Management reviews these patterns and assesses the adequacy  of the deferred revenue liability at the end of each fiscal quarter. Due  to the estimates involved in these assessments, adjustments to the  historical rates are generally made no more often than annually in  order to allow time for more definite trends to emerge.  The Company has a customer loyalty program, the Stuff Fur Stuff  club, whereby guests enroll in the program and receive one point for  every dollar spent and receive awards for various discounts on future  purchases after achieving defined point thresholds. An estimate of  the obligation related to the program, based on historical redemption  patterns, is recorded as deferred revenue and a reduction of net retail  sales.  Revenues from the sale of gift cards are recognized at the time  of redemption. Unredeemed gift cards are included in gift cards  and customer deposits on the consolidated balance sheets. The  company escheats a portion of unredeemed gift cards according to  the escheatment regulations of the relevant authority that generally  require remittance of the cost of merchandise portion of unredeemed  gift cards over five years old. The difference between the value of  gift cards and the amount escheated is recorded as income in the  consolidated statement of operations.  Net retail sales are net of discounts, exclude sales tax, and are  recognized at the time of sale. Shipping and handling costs billed to  customers are included in net retail sales.  The Company defers initial, one-time nonrefundable franchise  fees and amortizes them over the initial term of the respective  franchise agreements, which extend for periods up to 25 years. The  Company’s obligations under the contract are ongoing and include  operations and product development support and training, generally  concentrated around new store openings. Continuing franchise fees  are recognized as revenue as the fees are earned.  (l) Franchises  (m) Retail Revenue Recognition  (k) Deferred Rent  (j) Long-lived Assets  (i) Other Assets  (h) Other Intangible Assets  2013 FORM 10-K 39 BUILD-A-BEAR WORKSHOP, INC.  Notes to Consolidated Financial Statements  (continued)