Eme r s on 2013 Ann u al R e por t 29 during each period are allocated between inventories and cost of sales The Companys businesses review inventory for obsolescence make appropriate provisions and dispose of obsolete inventory on a regular basis Various factors are considered in these reviews including sales history and recent trends industry conditions and general economic conditions lO n G l I ved aSS et S Longlived assets which include property plant and equipment goodwill and identifable intangible assets are reviewed for impairment whenever events or changes in business circumstances indicate impairment may exist If the Company determines that the carrying value of a longlived asset may not be recoverable a permanent impairment charge is recorded for the amount by which the carrying value of the longlived asset exceeds its estimated fair value Reporting units are also reviewed for possible goodwill impairment at least annually in the fourth quarter If an initial assessment indicates it is more likely than not an impairment may exist it is evaluated by comparing the units estimated fair value to its carrying value Fair value is generally estimated using an income approach based on discounted future cash fows using a discount rate judged by management to be commensurate with the applicable risk Estimates of future sales operating results cash fows and discount rates are subject to changes in the economic environment including such factors as the general level of market interest rates expected equity market returns and volatility of markets served particularly when recessionary economic circumstances continue for an extended period of time Management believes the estimates of future cash fows and fair values are reasonable however changes in estimates due to variance from assumptions could materially affect the evaluations At the end of 2013 Emersons total market value based on its exchangetraded stock price was approximately 46 billion while its common stockholders equity was 11 billionThe European network power systems business with goodwill of 10 billion has faced integration challenges as well as diffcult end markets stemming from the fnancial crisis and persistent weak economy in Europe The estimated fair value of this business exceeded its carrying value by less than 10 percent The assumptions used in estimating fair value include the resumption of economic growth in Europe continued successful execution of plans to expand the business and improve the cost structure and end market growth for data center services and solutions including uninterruptible power supplies and precision cooling Ret IR e M ent Plan S While the Company continues to focus on a prudent longterm investment strategy for its pensionrelated assets the determination of defned beneft plan expense and obligations are dependent on assumptions made including the expected annual rate of return on plan assets the discount rate and the rate of annual compensation increases Management believes that the assumptions used are appropriate however actual experience may differ In accordance with US generally accepted accounting principles actual results that differ from the Companys assumptions are accumulated as deferred actuarial gains or losses and amortized to expense in future periods As of September 30 2013 pension plans were underfunded by a total of 121 million which includes 368 million of unfunded plans The Company contributed 160 million to defned beneft plans in 2013 and expects to contribute approximately 145 million in 2014 At yearend 2013 the discount rate for US plans was 475 percent and was 400 percent in 2012 The assumed investment return on plan assets was 775 percent in both 2013 and 2012 and is expected to be 750 percent in 2014 Deferred actuarial losses to be amortized to expense in future years were 12 billion 800 million aftertax as of September 30 2013 Defned beneft pension plan expense for 2014 is expected to be approximately 155 million compared with 228 million in 2013 which refects the impact of the higher interest rate environment and favorable investment performance the last two years See Notes 10 and 11 In COM e t axe S Income tax expense and tax assets and liabilities refect managements assessment of taxes paid or expected to be paid received on items included in the fnancial statements Uncertainty exists regarding tax positions taken in previously fled tax returns still under examination and positions expected to be taken in future returns Deferred tax assets and liabilities arise because of temporary differences between the consolidated fnancial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards Deferred income taxes are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be recovered or settled Valuation allowances are provided to reduce deferred tax assets to the amount that will more likely than not be realized The impact on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date The Company also pays US federal income taxes net of available foreign tax credits on cash repatriated from nonUS locations No provision is made for US income taxes on the undistributed earnings of nonUS subsidiaries where these earnings are considered permanently invested or otherwise indefnitely retained for continuing