Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

These Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2011. Except for the following, there have been no significant changes in the Company’s significant accounting policies for the three or nine months ended September 30, 2012, as compared to the significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2011. Refer to Note 4—Acquisition of Solar Green Technology for discussion of the transaction behind this change.

Goodwill—Goodwill is the excess of purchase price over the fair value of net assets acquired. The carrying value of goodwill is evaluated for impairment on an annual basis, or more frequently if certain indicators are present, using a fair-value-based approach. The Company evaluated the carrying value of its goodwill at December 31, 2011, and determined that no impairment of goodwill was identified during any of the periods presented. At September 30, 2012, due primarily to the recent reduction in the Company’s market capitalization, the Company’s market value was significantly below its book value, thus triggering an impairment analysis. As a result of this analysis, the Company recorded a goodwill impairment charge of $5.2 million, the amount of which was measured using a discounted cash flow analysis using level 3 unobservable inputs. Refer to Note 7—Goodwill and Other Intangible Assets for further details.

Long-lived assets other than goodwill—Long-lived assets include property, plant and equipment and intangible assets. The Company’s intangible assets consist of patents and customer relationships and are amortized on a straight-line basis over their useful lives consistent with the estimated useful life considerations used in the determination of their fair values. Valuation techniques consistent with the market approach, income approach and/or cost approach are used to measure fair value. Long-lived assets are reviewed for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the estimated fair value less costs to sell and are not depreciated.