Note 6. Property and equipment, net

Property and equipment consisted of the following as of June 30, 2024 and 2023 (in thousands):

The Company recorded depreciation expense of $10.1 million and $9.2 million for the years ended June 30, 2024 and 2023, respectively.

Property, plant and equipment are stated at historical cost and depreciated on the straight-line method over the estimated useful lives of the assets. Machinery and equipment are depreciated over periods ranging from 2 years to 10 years and buildings and improvements over periods up to 11 years. We review long-lived assets for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. Such conditions could include significant adverse changes in the business climate, current-period operating or cash flow losses, significant declines in forecasted operations, or a current expectation that an asset group will be disposed of before the end of its useful life. We perform undiscounted operating cash flow analyses to determine if an impairment exists. When testing for impairment of assets held for use, we group assets at the lowest level for which cash flows are separately identifiable. If an impairment is determined to exist, the loss is calculated as the difference between the estimated fair value, utilizing cost and market approaches, and the carrying value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability.

During the June 2024 quarter, the continued decline in stock price and reduction in operating cash flow forecasts led the Company to conclude that an indicator of impairment existed for the RF Filters Segment. The Company performed a recoverability test on the long-lived assets in the RF Filters Segment (“Filter Assets”) in which the undiscounted future cash flows expected from the use of the Filter Assets are compared to the carrying value of those assets and determined that the Filter Assets are not considered recoverable.

The Company then determined the fair value of the of the Filter Assets under an orderly liquidation scenario utilizing a market and cost approach. The resulting fair value of the Filter Assets of $10.9 million was below the carrying amount of the Filter Assets. As a result, the Company recorded an impairment charge against property plant and equipment of $35.4 million for the year ended June 30, 2024 which is included in operating expenses in the Consolidated Statement of Operations.

As of June 30, 2024, equipment with a net book value totaling $0.9 million had not been placed in service and therefore was not depreciated during the period. As of June 30, 2023, fixed assets with a net book value totaling $7.1 million had not been placed in service and therefore was not depreciated during the period.