Note 2 - Property and Equipment

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note 2.    Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation for Gamma Knife units and other equipment is determined using the straight-line method over the estimated useful lives of the assets, which for medical and office equipment is generally 3 – 10 years, and after accounting for salvage value on the equipment where indicated. As of  April 1, 2021, the Company reduced its estimate for salvage value for nine of its Gamma Knife units. The net effect of this change in estimate for the three and nine-month periods ended September 30, 2021, was a decrease in net income of approximately $114,000 or $0.02 per diluted share and $228,000 or $0.04 per diluted share, respectively. This change in estimate will also impact future periods. Salvage value is based on the estimated fair value of the equipment at the end of its useful life.

Depreciation for PBRT equipment is determined using the modified units of production method, which is a function of both time and usage of the equipment. This depreciation method allocates costs considering the projected volume of usage through the useful life of the PBRT unit, which has been estimated at 20 years. The estimated useful life of the PBRT unit is consistent with the estimated economic life of 20 years.

The following table summarizes property and equipment as of September 30, 2021 and December 31, 2020:

	September 30,			December 31,
	2021			2020
Medical equipment and facilities	$	72,175,000		$	75,657,000
Office equipment		606,000			330,000
Construction in progress		86,000			170,000
		72,867,000			76,157,000
Accumulated depreciation		(44,605,000	)		(45,739,000	)
Net property and equipment	$	28,262,000		$	30,418,000

As of September 30, 2021, approximately $2,809,000 of the net property and equipment balance is outside of the United States.