Kodiak Sciences Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 93 Propertyt and Equipm i ent, Net Property and equipment are stated at cost, net of accumulated depreciation. Construc r tion in progress reflects amounts incurred for construc r tion or improvements of property or equipment that have not been placed in service. Construc r tion in progress is transfer f red to specific f property and equipment and depreciated when these assets are ready for their intended use. Depreciation is computed using the straight-line method over the estimated useful f lives of the assets, which generally follows: Asset Category Useful f Lives Furniture and Fixtur t es 5 years Machinery r and Equipment 3 to 10 years Computer Software and Hardware 3 to 5 years Leasehold improvements Lesser of the useful f lifef or the term of the respective lease Upon sale or retirement of assets, the costs and related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to operations as incurred. Impai m rm i ent of Long-L g ived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverabl a e. Recoverabi a lity is measured by comparison of the carrying amount of the assets to the estimated undiscounted net cash flows which the assets are expected to generate. If such assets are deemed not recoverabl a e, an impairment loss is recognized in the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. The Company applied significant judgment in determining it has one asset group and that there is no lower level to group assets for impairment testing. The determination of the asset group primarily considers the interdependencies of its assets, shared cost structur t e, and the interrelated future cash flow generation. The Company assessed the recoverabi a lity of its asset group in 2023 based on the Company’s decision to wind-down the tarcocimab program following the topline results from the Phase 3 GLEAM and GLIMMER studi t es. The Company determined that the estimated undiscounted net cash flows which the asset group was forecasted to generate exceeded the carrying amount of the asset group. Therefor f e, no impairment loss was recognized in 2023. There was also no such impairment of long-lived assets in the year ended December 31, 2022. Research and Developm l ent Expe x nses Costs related to research, design and development of products are charged to research and development expense as incurred. Research and development costs include, but are not limited to, payroll and personnel expenses, including stock- based compensation, labor a atory r suppl u ies, outside services and allocated overhead, including rent, depreciation and utilities. Accrued Research and Develop l ment The Company has entered into various agreements with various third parties, including clinical investigator sites, contract research organizations (“CROs”) and contract manufac f turing organizations (“CMOs”), to provide research and development activities. The Company’s accrue r d research and development costs are estimated based on the level of services performed, including the phase or completion of events, and contracted costs. Accrue r d clinical trial and related costs are estimated using data such as patient enrollment, clinical site activations or information provided by outside service providers regarding their actua t l costs incurred. Management determines accrua r l estimates through reports from and discussions with clinical personnel and outside service providers as to the progress of trials, or the services completed. The estimated costs of research and development provided, but not yet invoiced, are included in accrue r d and other current liabi a lities on the consolidated balance sheet. If the actual timing of the performance of services or the level of effo f rt varies from the original estimates, the Company will adju d st the accrua r l accordingly. Payments made to third parties under these arrangements in advance of the performance of the related services are recorded as prepaid expenses or other assets until the services are rendered.