Excess Reorganization Value
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6 Months Ended |
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Jun. 30, 2011
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Excess Reorganization Value [Abstract] | |
Excess Reorganization Value |
6. Excess Reorganization Value
Reorganization value in excess of identifiable assets (“excess reorganization value”) is an
indefinite life intangible asset that was created upon NVR’s emergence from bankruptcy on September
30, 1993. Based on the allocation of the reorganization value, the portion of the reorganization
value which was not attributed to specific tangible or intangible assets has been reported as
excess reorganization value, which is treated similarly to goodwill. Excess reorganization value
is not subject to amortization. Rather, excess reorganization value is subject to an impairment
assessment on an annual basis or more frequently if changes in events or circumstances indicate
that impairment may have occurred. Because excess reorganization value was based on the
reorganization value of NVR’s entire enterprise upon bankruptcy emergence, the impairment
assessment is conducted on an enterprise basis based on the comparison of NVR’s total equity
compared to the market value of NVR’s outstanding publicly-traded common stock. The Company
completed the annual assessment of impairment during the first quarter of 2011 and determined that
there was no impairment of excess reorganization value.
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