XML 33 R12.htm IDEA: XBRL DOCUMENT v3.20.4
Property, plant and equipment
12 Months Ended
Dec. 31, 2020
Property Plant And Equipment [Abstract]  
Property, plant and equipment

6.

Property, plant and equipment

 

Property, plant and equipment is stated at cost less accumulated depreciation, or when acquired as part of a business combination, at estimated fair value. Costs include all expenditures necessary to place the asset in service, generally including freight and sales and use taxes. Property, plant and equipment includes instrumentation held by customers, which is generally used to facilitate the implantation of the Company’s products.

The useful lives of these assets are generally as follows:

 

 

 

Years

Buildings

 

25 to 33

Plant and equipment

 

1 to 10

Instrumentation

 

3 to 4

Computer software

 

3 to 7

Furniture and fixtures

 

4 to 8

 

The Company evaluates the useful lives of these assets on an annual basis. Depreciation is computed on a straight-line basis over the useful lives of the assets. Depreciation of leasehold improvements is computed over the shorter of the lease term or the useful life of the asset. Total depreciation expense was $19.3 million, $17.7 million and $15.9 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Expenditures for maintenance and repairs and minor renewals and improvements, which do not extend the lives of the respective assets, are expensed as incurred. All other expenditures for renewals and improvements are capitalized. The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service.

 

 

December 31,

 

(U.S. Dollars, in thousands)

 

2020

 

 

2019

 

Cost

 

 

 

 

 

 

 

 

Buildings

 

$

4,096

 

 

$

3,731

 

Plant and equipment

 

 

50,159

 

 

 

46,470

 

Instrumentation

 

 

93,252

 

 

 

82,327

 

Computer software

 

 

52,565

 

 

 

49,696

 

Furniture and fixtures

 

 

8,024

 

 

 

7,328

 

Construction in progress

 

 

1,628

 

 

 

2,201

 

Finance lease assets

 

 

23,337

 

 

 

21,179

 

Property, plant, and equipment, gross

 

 

233,061

 

 

 

212,932

 

Accumulated depreciation

 

 

(169,448

)

 

 

(150,205

)

Property, plant, and equipment, net

 

$

63,613

 

 

$

62,727

 

 

The Company capitalizes system development costs related to internal-use software during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, generally three to seven years.

 

In 2019, the Company entered into an amendment for its corporate headquarters lease. As a result, the classification of this lease changed from an operating lease to a finance lease. This resulted in an increase to both the lease liability and lease asset of approximately $8.0 million, when compared to the original operating lease assets and liabilities recorded upon the adoption of ASU 2016-02.

 

 

Long-lived assets are evaluated for impairment whenever events or changes in circumstances have occurred that would indicate impairment. For purposes of the evaluation, the Company groups its long-lived assets with other assets and liabilities at the lowest level of identifiable cash flows if the asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to the fair value in the period identified.

 

The Company generally determines fair value of long-lived assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with the assets, the Company uses estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset group. The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment.