compare the company's total investment in inventory with prior stated numbers. keep in mind that the number they show as inventory reflected in total assets includes depreciation figures:
(b) DVD's and Video Games Library.
As of June 30, 2006, the Company has invested over $3,300,000.00 in our DVD and video game library resulting in approximately 50,000 DVD and video game titles available for rental. We acquire DVD's and video games from distributors through a direct purchase agreement. Such purchases are recorded at the historical cost. We depreciate our DVD's and video games library on a straight-line basis over a twelve- month period. We currently have not assigned a salvage value since it is our intention to not sell our library. In the event that we do sell a portion of our library as result of slow moving title rentals, we will re-evaluate our policy of depreciation in relation to the salvage value.
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