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OHL USA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 Note 2 - Summary of Significant Accounting Policies (cont'd.) Goodwill and Intanaible Assets Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. In order to alleviate the cost and complexities associated with the goodwill impairment assessment under FASB ASC Topic 350, USA and Community elected to amortize the net book value of goodwill and test goodwill for impairment on an entity -wide basis rather than at a reporting unit level. The net book value of goodwill acquired will be amortized on a straight-line basis over a useful life of ten years. Goodwill of the entity shall be tested for impairment when events occur or circumstances change that would more likely than not reduce the fair value of the entity below its carrying amount. These events are termed triggering events. If USA and Community determine that there are no triggering events, further testing is unnecessary. No triggering events occurred during the year ended December 31, 2020. In accordance with FASB ASC Subtopic 350-30, Intangibles - Goodwill and Other, the Company reviews intangible assets with an indefinite life for impairment at least annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. In accordance with FASB ASC Subtopic 360-10, Impairment or Disposal of Long - Lived Assets, the Company reviews intangible assets subject to amortization for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Recoverability of long-lived assets is measured by comparing the carrying amount of the asset or asset group to the undiscounted cash flows that the asset or asset group is expected to generate. If the undiscounted cash flows of such assets are less than the carrying amount, the impairment to be recognized is measured by the amount by which the carrying amount, if any, exceeds its fair value. No impairment was deemed to exist at December 31, 2020. Noncontrollina Interest The Company follows the accounting and reporting standards for the noncontrolling interest in its consolidated joint ventures in accordance with FASB ASC Subtopic 810-10-65. For joint ventures that are consolidated, 100% of the balance sheet and income statement is consolidated with the Company. The joint venture partners' portion of equity and net income is then reported as noncontrolling interest. 20