Subject: Asset Impairment Review

To: Files

From: Gaspar Vasquez

Date: XX/XX/13

Subject: Asset Impairment Review

General Background

On an annual basis, the IT Finance department reviews an SAP generated listing of Capitalized IT Assets in conjunction with the supporting project documentation. These items are reviewed and discussed (as appropriate) with the respective Divisional CIO’s (DCIO) to determine, based upon everyone’s knowledge of activities whether one of the following (triggering events) has occurred related to computer software being developed or currently in use:

a. Internal-use computer software is no longer expected to provide substantive service potential,

b. A significant change occurs in the extent or manner, in which the software is being used or is expected to be used,

c. A significant change is made or will be made to the software program,

d. Costs of developing or modifying internal-use computer software significantly exceed the amount originally expected to develop or modify the software.

If the asset is determined to be impaired and not recoverable, the remaining net book value is recorded as an impairment loss.

Fiscal 2013 Review and Procedures Performed

An asset impairment evaluation was performed at the close of October XXX. A total of $XXX was written off as impaired assets. Please refer to attached documentation for supporting details.