Company: MGRC
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023116
Chunk: 2

Company: MCGRATH RENTCORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 2
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          Relocatable modular buildings
           
          18 years, 50% residual value

          Relocatable modular accessories
           
          3 to 18 years, no residual value

          Blast resistant and kitchen modules
           
          20 years, no residual value

          Portable storage containers
              
          25 years, 62.5% residual value

          Electronic test equipment and accessories
           
          1 to 8 years, no residual value

        Costs of Rental Related ServicesCosts of rental related services are primarily associated with relocatable modular building and portable storage container leases. Modular building leases primarily consist of costs for services to be provided under the negotiated lease agreement for delivery, installation, modifications, skirting, additional site-related work, and dismantle and return delivery.  Costs related to these services are recognized on a straight-line basis over the term of the lease.  Costs of rental related services associated with portable storage containers consists of costs of delivery, removal and cleaning of the containers.  These costs are recognized in the period the service is performed.Impairment of Long-Lived AssetsThe Company evaluates the carrying value of rental equipment and identifiable definite lived intangible assets for impairment whenever events or circumstances have occurred that would indicate the carrying amount may not be fully recoverable.  A key element in determining the recoverability of long-lived assets is the Company’s outlook as to the future market conditions for its rental equipment.  If the carrying amount is not fully recoverable, an impairment loss is recognized to reduce the carrying amount to fair value.  The Company determines fair value based upon the condition of the rental equipment and the projected net cash flows from its rental and sale considering current market conditions.  Goodwill and identifiable indefinite lived assets are evaluated for potential impairment annually or when circumstances indicate potential impairment may have occurred.  Impairment losses, if any, are determined based upon the excess of carrying value over the estimated fair value of the asset.  There were no impairments of long-lived assets during the years ended December 31, 2024, 2023 and 2022. Other Direct Costs of Rental OperationsOther direct costs of rental operations include direct labor, supplies, repairs, insurance, property taxes, license fees, impairment of rental equipment and certain modular lease costs charged to customers in the negotiated rental rate, which are recognized on a straight-line basis over the term of the lease.Cost of SalesCost of sales in the consolidated statements of income includes