Disclosures related to other fair value measurements are included below in Impairment of Long-Lived Assets, in Note F (Debt) and in Note J (Retirement Benefits).
Cash Equivalents. All highly liquid investments with a maturity of three months or less at the date of purchase are considered to be cash equivalents.
Accounts Receivable. Accounts receivable includes trade receivables of $209 million in 2016 and $217 million in 2015. Other receivables totaled $9 million in 2016 and $9 million in 2015.
Inventory Valuation. Inventories are stated at the lower of cost or market. The last-in, first-out (LIFO) cost method is used for valuing most U.S. inventories. Inventories of foreign subsidiaries are valued using the first-in, first-out (FIFO) cost method.
Other Current Assets. Amounts included in other current assets were (in thousands):
Prepaid income taxes
Prepaid expenses and other
Cash balances included within other current assets were restricted to funding of certain self-insured loss reserves.
Impairment of Long-Lived Assets. The Company evaluates long-lived assets (including property and equipment, goodwill and other intangible assets) for impairment annually in the fourth quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
In 2016, operating results of our Oil and Natural Gas (“ONG”) reporting unit within the Process segment fell short of expectations. At the end of the third quarter, we concluded that the depth and length of industry weakness, and its continuing impact on ONG results, were greater than previously expected, so we initiated an impairment analysis. With the help of an independent valuation consultant, we used an income approach to determine the fair value of the ONG reporting unit and its underlying intangible assets. We completed the valuation in the fourth quarter, and recorded adjustments to reduce goodwill by $147 million and customer relationship and trade name intangibles by $34 million and $11 million, respectively. The goodwill adjustment eliminated all of the goodwill balances within the ONG reporting unit. The non-cash impairment charges reduced operating earnings by $192 million, created a $31 million deferred tax benefit, and decreased net earnings by $161 million.
We completed our annual impairment review of all long-lived assets in the fourth quarter. No further impairment charges were recorded as a result of that review.
Property, Plant and Equipment. For financial reporting purposes, plant and equipment are depreciated over their estimated useful lives, primarily by using the straight-line method as follows:
Buildings and improvements
10 to 30 years
lesser of 5 to 10 years or life of lease
lesser of 5 to 10 years or life of equipment
Office, warehouse and automotive equipment
3 to 10 years