Company: LEN
Filing Date: 2025-04-04
Form Type: 10-Q
Source: 0001628280-25-016792
Chunk: 103

Company: LENNAR CORP /NEW/
Filing Date: 2025-04-04
Form: 10-Q
Item: Item 8
Chunk 103
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 progress, and land and land under development were included in Homebuilding costs and expenses.(3)Forfeited deposits and write-off of pre-acquisition costs on real estate were included in Homebuilding costs and expenses in the Company's condensed consolidated statements of operations and comprehensive income (loss).(4)Valuation adjustments related to investments in unconsolidated entities were primarily included in Multifamily other income (expense), net in the Company's condensed consolidated statements of operations and comprehensive income (loss) for the three months ended February 28, 2025.Finished homes and construction in progress are included within inventories. Inventories are stated at cost unless the inventory within a community is determined to be impaired, in which case the impaired inventory is written down to fair value. The Company disclosed its accounting policy related to inventories and its review for indicators of impairment in the Summary of Significant Accounting Policies in its Annual Report on Form 10-K for the year ended November 30, 2024.The Company estimates the fair value of inventory evaluated for impairment based on market conditions and assumptions made by management at the time the inventory is evaluated, which may differ materially from actual results if market conditions or assumptions change. For example, changes in market conditions and other specific developments or changes in assumptions may cause the Company to re-evaluate its strategy regarding previously impaired inventory, as well as inventory not currently impaired but for which indicators of impairment may arise if market deterioration occurs, and certain other assets that could result in further valuation adjustments and/or additional write-offs of option deposits and pre-acquisition costs due to abandonment of those options contracts.On a quarterly basis, the Company reviews its active communities for indicators of potential impairments. The table below summarizes communities reviewed for indicators of impairment and communities with valuation adjustments recorded: Communities with valuation adjustmentsAt or for the Three Months Ended# of active communities# of communities with potential indicator of impairment# of communitiesFair Value(in thousands)Valuation Adjustments(in thousands)February 28, 20251,584462$14,934 $3,834 February 29, 20241,2273124,863 1,521 The table below summarizes the most significant unobservable inputs used in the Company's discounted cash flow model to determine the fair value of its communities for which the Company recorded valuation adjustments:Three Months EndedFebruary 28, 2025February 29, 2024Unobservable inputsRangeRangeAverage selling price (1)$215,000—571,000178,000—197,000Absorption