Company: LGIH
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001580670-25-000016
Chunk: 10

Company: LGI Homes, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 8
Chunk 10
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 option or purchase contract with an entity and make a nonrefundable deposit, we may have a variable interest in a variable interest entity (“VIE”). In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE and would consolidate the VIE if we are deemed to be the primary beneficiary. As of December 31, 2024 and 2023, we were not deemed to be the primary beneficiary for any VIEs associated with non-refundable land deposits.Deferred Loan CostsDeferred loan costs represent debt issuance costs related to a recognized debt liability and are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Other AssetsOther assets consist primarily of land held for sale, municipal utility district reimbursements, prepaid insurance, prepaid expenses, financing arrangement commitment fees, right-of-use (“ROU”) assets, investments in unconsolidated entities,  forward commitments and other receivables. Prepaid insurance and prepaid expenses were $14.1 million and $6.9 million as of December 31, 2024 and 2023, respectively.

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We have investments in unconsolidated entities with independent third parties. The equity method of accounting is used for unconsolidated entities over which we have significant influence; generally, this represents ownership interests of at least 20% and not more than 50%. Under the equity method of accounting, we recognize our proportionate share of the earnings and losses of this entity.We evaluate our investments in unconsolidated entities for recoverability in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures. If we determine that a loss in the value of any of the investments is other than temporary, we write down the investment to its estimated fair value. Any such losses are recorded to equity in (earnings) loss of unconsolidated entities, which is reflected in other income, net.Property and Equipment, NetProperty and equipment are stated at cost, less accumulated depreciation. Depreciation expense is recorded in general and administrative expenses and in other income, net for rental properties. Upon sale or retirement, the costs and related accumulated depreciation are eliminated from the respective accounts and any resulting gain or loss is included in other income, net. Depreciation is generally computed using the straight-line method over the estimated useful lives of the assets, ranging from two to five years for property and equipment and 27.5 years for our rental properties. Leasehold improvements are depreciated over