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S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/01/1999
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            AVALON CABLE OF MICHIGAN HOLDINGS, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                  (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
                               DECEMBER 31, 1998
 
Depreciation is computed for financial statement purposes using the
straight-line method based on the following lives:
 

<TABLE>
<S>                                                           <C>
Buildings and improvements..................................  10-25 years
Cable plant and equipment...................................   5-12 years
Vehicles....................................................      5 years
Office furniture and equipment..............................   5-10 years
</TABLE>

 
  Intangible assets
 
     Intangible assets represent the estimated fair value of cable franchises
and goodwill resulting from acquisitions. Cable franchises are amortized over a
period ranging from 13 to 15 years on a straight-line basis. Goodwill is the
excess of the purchase price over the fair value of the net assets acquired,
determined through an independent appraisal, and is amortized over 15 years
using the straight-line method. Deferred financing costs represent direct costs
incurred to obtain long-term financing and are amortized to interest expense
over the term of the underlying debt utilizing the effective interest method.
 
  Accounting for impairments
 
     The Company follows the provisions of Statement of Financial Accounting
Standards No. 121 -- "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" ("SFAS 121").
 
     SFAS 121 requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. In performing the review for recoverability, the Company
estimates the net future cash flows expected to result from the use of the asset
and its eventual disposition. If the sum of the expected net future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the asset, an impairment loss is recognized. Measurement of an impairment loss
for long-lived assets and identifiable intangibles expected to be held and used
is based on the fair value of the asset.
 
     No impairment losses have been recognized by the Company pursuant to SFAS
121.
 
  Fair value of Financial Instruments
 
     The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:
 
          a. The Company estimates that the fair value of all financial
     instruments at December 31, 1998 does not differ materially from the
     aggregate carrying values of its financial instruments recorded in the
     accompanying balance sheet. The fair value of the notes payable-affiliate
     are considered to be equal to carrying values since the Company believes
     that its credit risk has not changed from the time this debt instrument was
     executed and therefore, would obtain a similar rate in the current market.
 
          b. The fair value of the cash and temporary cash investments
     approximates fair value because of the short maturity of these instruments.
 
                                      F-337