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CUBELLIS BUSINESS TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . Note 2 - Summary of Significant Accounting Policics (Continued) Accounts Receivable ThL' Company carries its accounts receivable net of an allowann: for doubtful accounts. On a periodic basis. the Compan) evaluates its accounts receivable and adjusts the allowanccs for doubtful accounts as necessary based on a history of past \\Tite-ofTs. collections and current credit conditions. The Company does not accrue interest on trade receivables. Equipment and Improvements Equipment and imprnvements are recorded at cost. i\'lajor additions and improvements are capitalized. while repairs anu maintenance are charged to expense as incurred. [)\.'preciation is computed using straight-linc and accelerated methods over the estimated lives of the assets. Computer Software Computer software is recorded at cost and amortized over its estimated useful life. Accumulated amortization at December 31. 2006 and 200.5 \Vas $629.713 and $3 S I A.51. respecti vell'. . Goodwill Goodwill represents the excess of consideration paid over the net assets obtained in connection with acquired businesses. In accoruance \vith Statement of Financial Accounting Standards No. 142. "Goodwill and Other Intangible Assets" (SFAS 142). the Company is required to perfonn an annual assessment to determine whether goodwill has been impaireu. No impairment has been identified since the adoption t)r SFAS l42. Advertising Costs The Company expenses advertising costs as they are incurred. Advertising expense I()r 2006 and 200S was approximately $175.900 and $207.700. respectively. Income Taxes The Company is a wholly O\\ned suhsidiary or the Trust. For income tax purposes. the Trust elected to include the taxahle income and deuuctions of the Company, incluuing its Cubellis \-Iarco Associates. Inc. and Cubellis/lvlCiDF Associaks, Inc. subsidiaries. as its own pursuant [0 a qualified S corporation subsidiary election. Furthermore. the Trust and its bencliciaries c1ecku S corporation status ror kderal income tax purposes and. accordingly. the taxable income and losses or the Trust an: included on the federal income tax returns or the beneficiaries. It is management's intention to fund required tax payments through distrihutions. For lvlassachusl:tts income tax purposes. the I'rust. and not its bencliciarics. is subject to Massachusetts income tax. I'he Trust is taxeJ on its ~lassachusetts taxahle income and allocates to the Company its share or the related tax pro\ision. IklCrred income taxes rellect the impact llf temporary difrerences of reporting assets anu liabilities under the accrual method or accounting used in the preparation of the tinancial statements and the cash ba:-;is or accounting used to prepare the corporate income tax returns. . Reclassifications Certain 200) amounts havc been reclassified to conform to the ~OOo presentation. s