## NOTE 4—GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS 

During 2004, the Company recognized goodwill in the acquisitions of Duron, PSB and Kinlita of $116,208, $212,082 and $4,944, respectively. Identifiable intangi- ble assets valued in the acquisitions were trademarks of $41,300, a covenant not to compete of $33,000 and a customer list of $10,600 for Duron and trademarks of $44,300, a customer list of $8,800 and a patent of $1,550 for PSB. Acquired intangible assets subject to amortization are being amortized over weighted-average periods of 3 years for the non-compete covenant, 11 years for the customer lists and 13.5 years for the patent. No significant residual value was estimated for these assets. 

During 2003, the Company recorded additions of $19,555 in intangible assets, primarily related to $17,540 of technology-based assets of Accurate Disper- sions. Acquired intangible assets subject to amortization are being amortized over weighted-average periods of 7 years for software and 17 years for all other intangible assets. No significant residual value was estimated for these assets. 

In accordance with SFAS No. 144, whenever events or changes in circumstances indicated that the carrying value of long-lived assets may not be recoverable or the useful life had changed, impairment tests were per- formed. Undiscounted cash flows were used to calculate the fair value of long-lived assets to determine if such assets were impaired. Where impairment was identified, a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets, was used to determine the fair value for the assets. 

During 2004, an impairment test was performed for capitalized software costs due to the replacement and significant changes in the utilization of certain software. A reduction in the carrying value of capitalized software costs of $2,085 was charged to Selling, general and administrative expenses in the Administrative Segment. Assets related to a customer sales incentive program were tested for impairment due to lower than anticipat- ed sales performance, resulting in a reduction in carry- ing value and a charge of $9,790 to Net sales in the Consumer Segment. A reduction in the carrying value of certain manufacturing equipment in the Consumer Seg- ment of $133 was charged to Cost of goods sold. 

During 2003, an impairment test was performed for capitalized software costs due to the replacement and 

significant changes in the utilization of certain software. A reduction in the carrying value of capitalized software costs of $3,784 and $7,657 was charged to Selling, gen- eral and administrative expenses in the Consumer and Administrative Segments, respectively. 

During 2002, a devaluation of the Argentine peso indicated that an impairment of other long-lived assets for the Argentina subsidiary was probable. Fair values and the resulting impairment were determined in accor- dance with SFAS No. 144. A reduction of $8,997 in the carrying value of other long-lived assets of the Automo- tive and International Coatings Segments’ Argentina reporting units was charged to Cost of goods sold ($6,502) and Selling, general and administrative expenses ($2,495) in the first quarter of 2002. 

Also during 2002, an impairment of other long-lived assets in the Consumer Segment was deemed probable relating to capitalized software costs due to the replace- ment and significant changes in the utilization of certain software. A reduction in the carrying value of capital- ized software costs of $7,344 was charged to Selling, general and administrative expenses. 

Goodwill and trademarks with indefinite lives are required by SFAS No. 142 to be periodically tested for impairment. October 1 has been established for the annual impairment review. Fair values are estimated sep- arately for goodwill and trademarks with indefinite lives using a discounted cash flow valuation model, incorpo- rating discount rates commensurate with the risks involved for each group of assets. The annual impair- ment review performed as of October 1, 2004 resulted in reductions in the carrying value of certain trademarks with indefinite lives of $2,548, which was charged to Cost of goods sold in the Consumer Segment. The impairment of trademarks with indefinite lives related to reduction in estimated discounted cash flows. 

The annual impairment review performed as of October 1, 2003 resulted in reductions in the carrying value of certain trademarks with indefinite lives of $1,013, which was charged to Selling, general and administrative expenses in the Consumer Segment. The impairment of trademarks with indefinite lives related to lower-than-anticipated sales of certain acquired domestic brands. 

The annual impairment review performed as of October 1, 2002 resulted in reductions in the carrying values of goodwill of $2,401 and trademarks with indef- inite lives of $1,206. The total of $3,607 was charged to Cost of goods sold ($801) and Selling, general and 

