Inventories:  Inventories are stated at the lower of cost or  market. Cost is determined principally under the average  cost method. Adjustments to the Company’s lower of cost or  market inventory reserve are reflected in cost of products sold  in the Consolidated Statements of Operations. Property, Plant and Equipment:  Property, plant and equip- ment are stated at cost. The Company uses the straight-line  method in computing depreciation. The annual provisions for  depreciation have been computed principally using the follow- ing ranges of asset lives: buildings 20 to 40 years, machinery  and equipment 5 to 10 years. Internal-use software development and implementation  costs are expensed until the Company has determined that  the software will result in probable future economic benefits,  and management has committed to funding the project.  Thereafter, all material development and implementation  costs, and purchased software costs, are capitalized and  amortized using the straight-line method over the remaining  estimated useful lives. Goodwill and Other Intangibles:  Goodwill and other intangible  assets are originally recorded at their estimated fair values at  date of acquisition, and are allocated to reporting units that  will receive the related sales and income. The Company’s  reporting units represent operating segments (aggregations  of business units that have similar economic characteristics  and share the same production facilities, raw materials, and  labor force). Definite-lived intangible assets are amortized  over their estimated useful lives and are evaluated for impair- ment annually, or more frequently if impairment indicators  are present, using a process similar to that used to test  long-lived assets for impairment. Goodwill and indefinite-lived  intangible assets are tested annually for impairment, or more  frequently if impairment indicators arise. In conducting the annual impairment test for goodwill, the  Company first performs a qualitative assessment to deter- mine whether it is more likely than not ( >  50% likelihood) that  the fair value of any reporting unit is less than its carrying  amount. If the Company concludes this is the case, then a  two-step quantitative test for goodwill impairment is per- formed for the appropriate reporting units. Otherwise, the  Company concludes no impairment is indicated and does not  perform the two-step test. In conducting the initial qualitative assessment, the Company  analyzes actual and projected growth trends for net sales,  gross margin, and segment profit for each reporting unit, as  well as historical performance versus plan and the results  of prior quantitative tests performed. Additionally, each  reporting unit assesses critical areas that may impact their  business, including macroeconomic conditions and the related  impact, market related exposures, any plans to market all or a  portion of their business, competitive changes, new or discon- tinued product lines, changes in key personnel, or any other  potential risks to their projected financial results. If performed, the quantitative goodwill impairment test is a  two-step process performed at the reporting unit level. First,  the fair value of each reporting unit is compared to its corre- sponding carrying value, including goodwill. The fair value of  each reporting unit is estimated using discounted cash flow  valuations (Level 3), which incorporate assumptions regarding  future growth rates, terminal values, and discount rates.  The estimates and assumptions used consider historical  performance and are consistent with the assumptions used in  determining future profit plans for each reporting unit, which  are approved by the Company’s Board of Directors. If the first  step results in the carrying value exceeding the fair value of  any reporting unit, then a second step must be completed in  order to determine the amount of goodwill impairment that  should be recorded. In the second step, the implied fair value  of the reporting unit’s goodwill is determined by allocating  the reporting unit’s fair value to all of its assets and liabilities  other than goodwill in a manner similar to a purchase price  allocation. The implied fair value of the goodwill that results  from the application of this second step is then compared  to the carrying amount of the goodwill and an impairment  charge is recorded for the difference. Even if not required, the  Company periodically elects to perform the quantitative test in  order to confirm the qualitative assessment. Based on the qualitative assessment conducted in fiscal 2014,  performance of the quantitative two-step test was not required  for any of the Company’s reporting units. No goodwill impair- ment charges were recorded in fiscal years 2014, 2013, or 2012. In conducting the annual impairment test for its indefi- nite-lived intangible assets, the Company first performs a  qualitative assessment to determine whether it is more likely  than not ( >  50% likelihood) that an indefinite-lived intangible  asset is impaired. If the Company concludes that this is the  case, then a quantitative test for impairment must be per- formed. Otherwise, the Company does not need to perform a  quantitative test. In conducting the initial qualitative assessment, the Company  analyzes growth rates for historical and projected net  sales and the results of prior quantitative tests performed.  Additionally, each reporting unit assesses critical areas that  may impact their intangible assets or the applicable royalty  rates to determine if there are factors that could indicate  impairment of the asset. If performed, the quantitative impairment test compares the  fair value and carrying value of the indefinite-lived intangible  asset. The fair value of indefinite-lived intangible assets is  primarily determined on the basis of estimated discounted  value, using the relief from royalty method (Level 3), which  incorporates assumptions regarding future sales projections  and discount rates. If the carrying value exceeds fair value, the  indefinite-lived intangible asset is considered impaired and an  impairment charge is recorded for the difference. Even if not  required, the Company periodically elects to perform the quan- titative test in order to confirm the qualitative assessment. 39