The Company reviews the individual items included in its finished goods, used equipment and rental equipment
inventory on a model-by-model or unit-by-unit basis to determine if any item’s net realizable value is below its
carrying value each quarter. This analysis is expanded to include items in work-in-process and raw material
inventory if factors indicate those items may also be impacted. In performing this review, judgments are made
and, in addition to the factors discussed above, additional consideration is given to the age of the specific items
of used or rental inventory, prior sales offers or lack thereof, the physical condition of the specific items and
general market conditions for the specific items. Additionally, an analysis of raw material inventory is performed
each quarter to calculate reserves needed for obsolete inventory based upon quantities of items on hand, the
age of those items and their recent and expected future usage or sale.