Company: HEI-A
Filing Date: 2025-12-22
Form Type: 10-K
Source: 0000046619-25-000082
Chunk: 86

Company: HEICO CORP
Filing Date: 2025-12-22
Form: 10-K
Item: Item 8
Chunk 86
---
 contract assets and contract liabilities.Concentrations of Credit Risk    Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and trade accounts receivable.  The Company places its temporary cash investments with high credit quality financial institutions and limits the amount of credit exposure to any one financial institution.  Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers comprising the Company’s customer base and their dispersion across many different geographical regions.  The Company performs ongoing credit evaluations of its customers but does not generally require collateral to support customer receivables.Inventory    Inventory is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out or the average cost basis.  Losses, if any, are recognized fully in the period when they are identified.  The Company periodically evaluates the carrying value of inventory, giving consideration to factors such as its physical condition, sales patterns and expected future demand in order to estimate the amount necessary to write down any slow moving, obsolete or damaged inventory.  These estimates could vary significantly from actual amounts based upon future economic conditions, customer inventory levels or competitive factors that were not foreseen or did not exist when the estimated write-downs were made.  In 

61

accordance with industry practice, all inventories are classified as a current asset including portions with long production cycles, some of which may not be realized within one year.Property, Plant and Equipment    Property, plant and equipment is recorded at cost.  Depreciation and amortization is generally provided on the straight-line method over the estimated useful lives of the various assets.  The Company’s property, plant and equipment is generally depreciated over the following estimated useful lives:Buildings and improvements 10to40yearsMachinery and equipment 3to10yearsLeasehold improvements 2to20yearsTooling 2to5years    The costs of major additions and improvements are capitalized.  Leasehold improvements are amortized over the shorter of the leasehold improvement’s useful life or the lease term.Repairs and maintenance costs are expensed as incurred.  Upon an asset's disposition, its cost and related accumulated depreciation are removed from the financial accounts and any resulting gain or loss is reflected within earnings.LeasesThe Company’s lease arrangements primarily pertain to manufacturing facilities, office buildings, equipment, land and vehicles.  The Company evaluates whether a contractual arrangement that provides it with control over the use of an