Investments in Associated Companies
The Company accounts for its long-term investments in affiliated companies over which it has significant influence using the equity basis of accounting, whereby the investment is initially recorded at cost, adjusted to recognize the Company’s share of earnings or losses and reduced by dividends received.
The Company assesses its equity investments for impairment if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the equity investment and that the event or events has an impact on the estimated future cash flow of the investment that can be reliably estimated. Objective evidence of impairment of equity investments includes:
| • | Significant financial difficulty of the associated companies; | |
| • | Becoming probable that the associated companies will enter bankruptcy or other financial reorganization; or, | |
| • | National or local economic conditions that correlate with defaults of the associated companies. |