Revenue Recognition:  The Company recognizes sales when  title passes upon delivery of its products to customers, net of  applicable provisions for discounts, returns, and allowances.  Products are delivered upon receipt of customer purchase  orders with acceptable terms, including price and collectabil- ity that is reasonably assured. The Company offers various sales incentives to customers  and consumers. Incentives that are offered off-invoice include  prompt pay allowances, will call allowances, spoilage allow- ances, and temporary price reductions. These incentives are  recognized as reductions of revenue at the time title passes.  Coupons are used as an incentive for consumers to purchase  various products. The coupons reduce revenues at the time  they are offered, based on estimated redemption rates.  Promotional contracts are performed by customers to pro- mote the Company’s products to consumers. These incentives  reduce revenues at the time of performance through direct  payments and accrued promotional funds. Accrued promo- tional funds are unpaid liabilities for promotional contracts  in process or completed at the end of a quarter or fiscal year.  Promotional contractual accruals are based on agreements  with customers for defined performance. The liability relating  to these agreements is based on a review of the outstanding  contracts on which performance has taken place but for  which the promotional payments relating to such contracts  remain unpaid as of the end of the fiscal year. The level of  customer performance and the historical spend rate versus  contracted rates are significant estimates used to determine  these liabilities. Inventory Valuation:  The Company values its pork inventories  at the lower of cost or USDA market prices (primal values).  When the carcasses are disassembled and transferred from  primal processing to various manufacturing departments, the  primal values, as adjusted by the Company for product specifi- cations and further processing, become the basis for calculat- ing inventory values. Turkey raw materials are represented by  the deboned meat quantities. The Company values these raw  materials using a concept referred to as the “meat cost pool.”  The meat cost pool is determined by combining the cost to  grow turkeys with processing costs, less any net sales revenue  from by-products created from the processing and not used  in producing Company products. The Company has developed  a series of ratios using historical data and current market  conditions (which themselves involve estimates and judgment  determinations by the Company) to allocate the meat cost  pool to each meat component. Substantially all inventoriable  expenses, meat, packaging, and supplies are valued by the  average cost method. Goodwill and Other Intangibles:  The Company’s identifiable  intangible assets are amortized over their useful lives, unless  the useful life is determined to be indefinite. The useful life of  an identifiable intangible asset is based on an analysis of sev- eral factors including: contractual, regulatory, or legal obliga- tions, demand, competition, and industry trends. Goodwill and  indefinite-lived intangible assets are not amortized, but are  tested at least annually for impairment. 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 deter- mined 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  If performed, the quantitative goodwill impairment test is a  two-step process. First, the fair value of each reporting unit  is compared to its corresponding carrying value, including  goodwill. The fair value of each reporting unit is estimated  using discounted cash flow valuations. The assumptions  used in the estimate of fair value, including future growth  rates, terminal values, and discount rates, require significant  judgment. The estimates and assumptions used consider his- torical 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.  The Company reviews product growth patterns, market share  information, industry trends, peer group statistics, changes in  distribution channels, and economic indicators in determining  the estimates and assumptions used to develop cash flow and  profit plan assumptions. Additionally, the Company performs  sensitivity testing of the profit plan assumptions and discount  rate to assess the impact on the fair value for each reporting  unit under various circumstances. 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 its  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  discontinued product lines, changes in key personnel, and any  other potential risks to their projected financial results. All of  the assumptions used in the qualitative assessment require  significant judgment. The Company’s goodwill impairment test is performed at the  reporting unit level. The Company’s reporting units represent  operating segments (aggregations of business units that have  similar economic characteristics and share the same produc- tion facilities, raw materials, and labor force). In conducting  the goodwill impairment test, the Company first performs a  qualitative assessment to determine 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  that this is the case, then a two-step quantitative test for good- will impairment is performed for the appropriate reporting  units. Otherwise, the Company concludes that no impairment  is indicated and does not perform the two-step test. 15