CORE LABORATORIES N.V.  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013  Principles of Consolidation Use of Estimates 41 1. DESCRIPTION OF BUSINESS 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Core Laboratories N.V. (“Core Laboratories”, “we”, “our” or “us”) is a Netherlands limited liability company. We were established  in 1936 and are one of the world’s leading providers of proprietary and patented reservoir description, production enhancement and  reservoir management services to the oil and gas industry. These services are directed toward enabling our clients to improve reservoir  performance and increase oil and gas recovery from their producing fields. We have over 70 offices in more than 50 countries and  have approximately 5,000 employees. Our business units have been aggregated into three complementary segments which provide services and products for improving  reservoir performance and increasing oil and gas recovery from new and existing fields: (1) Reservoir Description, (2) Production  Enhancement and (3) Reservoir Management. For a description of product types and services offered by these business segments, see Note 15 Segment Reporting. The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting prin- ciples in the U.S. (“U.S. GAAP” or “GAAP”), and include the accounts of Core Laboratories and its subsidiaries for which we have  a controlling voting interest and/or a controlling financial interest. The equity method of accounting is used to record our interest in  investments in which we have less than a majority interest and do not exercise control but do exert significant influence. We use the  cost method to record certain other investments in which we own less than 20% of the outstanding equity and do not exercise control  or exert significant influence. We record non-controlling interest associated with consolidated subsidiaries that are less than 100%  owned. All inter-company transactions and balances have been eliminated in consolidation. The preparation of financial statements in accordance with U.S. GAAP requires management to make certain estimates and assump- tions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial  statements and the reported amounts of revenue and expenses during the reporting period. We evaluate our estimates on an ongoing  basis and utilize our historical experience, as well as various other assumptions that we believe are reasonable in a given circumstance,  in order to make these estimates. Actual results could differ from our estimates, as assumptions and conditions change. The following accounts, among others, require us to use critical estimates and assumptions: Accounting policies relating to these accounts and the nature of these estimates are further discussed under the applicable caption.  For each of these critical estimates it is at least reasonably possible that changes in these estimates will occur in the short term which  may impact our financial position or results of operations. • allowance for doubtful accounts; • inventory reserves; • depreciation and amortization; • long-lived assets, intangibles and goodwill; • income taxes;  • pensions and other postretirement benefits; and • stock-based compensation. 