Nordstrom, Inc. Notes to Consolidated Financial Statements Dollar and share amounts in millions except per share, per option and per unit amounts Leasehold improvements and leased property and equipment that are purchased at the inception of the lease, or during the lease term, are  depreciated over the shorter of the lease term or the asset life. Lease terms include the fixed, non-cancelable term of a lease, plus any  renewal periods determined to be reasonably assured.  Goodwill represents the excess of acquisition cost over the fair value of the related net assets acquired and is not subject to amortization. As  of January 31, 2015, we had Trunk Club goodwill of $261, HauteLook goodwill of $121 and Nordstrom.com and Jeffrey goodwill of $53. We  review our goodwill annually for impairment or when circumstances indicate its carrying value may not be recoverable. We perform this  evaluation at the reporting unit level, comprised of the principal business units within our Retail segment, through the application of a two-step  fair value test. The first step compares the carrying value of the reporting unit to its estimated fair value, which is based on the expected  present value of future cash flows (income approach), comparable public companies and acquisitions (market approach) or a combination of  both. If fair value is lower than the carrying value, then a second step is performed to quantify the amount of the impairment. The fair value of  Trunk Club’s reporting unit will be tested in 2015. Goodwill, Intangible Assets and Long-Lived Assets When facts and circumstances indicate that the carrying values of long-lived assets, including buildings, equipment and amortizable  intangible assets, may be impaired, we perform an evaluation of recoverability by comparing the carrying values of the net assets to their  related projected undiscounted future cash flows, in addition to other quantitative and qualitative analyses. Upon indication that the carrying  values of long-lived assets will not be recoverable, we recognize an impairment loss. We estimate the fair value of the assets using the  expected present value of future cash flows of the assets. Land, property and equipment are grouped at the lowest level at which there are  identifiable cash flows when assessing impairment. Cash flows for our retail store assets are identified at the individual store level, while our  intangible assets associated with HauteLook and Trunk Club are identified at their respective reporting unit levels. We did not record any  material impairment losses for long-lived tangible or amortizable intangible assets in 2014, 2013 or 2012. Amortization expense for acquired  intangibles was $10, $10 and $19 in 2014, 2013 and 2012. As of January 31, 2015, we expect future amortization expense of acquired  intangible assets of $16 in 2015, $15 in 2016, $11 in 2017, $7 in 2018 and $7 in 2019. We retain a portion of the risk for certain losses related to employee health and welfare, workers’ compensation and general liability claims.  Liabilities associated with these losses include undiscounted estimates of both losses reported and losses incurred but not yet reported. We  estimate our ultimate cost using an actuarially-based analysis of claims experience, regulatory changes and other relevant factors. As of January 31, 2015, we have opened one full-line store in Canada and have announced plans to open five additional full-line stores in  Canada over the next few years. The functional currency of our Canadian operations is the Canadian Dollar. We translate assets and  liabilities into U.S. Dollars using the exchange rate in effect at the balance sheet date, while we translate revenues and expenses using a  weighted-average exchange rate for the period. We record these translation adjustments as a component of accumulated other  comprehensive loss on the Consolidated Balance Sheets. In addition, our U.S. operations incurred certain expenditures denominated in  Canadian Dollars and our Canadian operations incurred certain expenditures denominated in U.S. Dollars. This activity results in transaction  gains and losses that arise from exchange rate fluctuations and are recorded as gains or losses in the Consolidated Statements of Earnings.  As of January 31, 2015, activities associated with the foreign currency exchange risk have not had a material impact on our consolidated  financial statements. Nordstrom, Inc. and subsidiaries 45 Self-Insurance Foreign Currency