Cablevision 2013 Annual Report Download - page 134

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share amounts)
F-25
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of Significant Accounting Policies
Revenue Recognition
The Company recognizes video, high-speed data, and voice services revenues as the services are provided
to subscribers. Installation revenue for the Company's video, consumer high-speed data and VoIP
services is recognized as installations are completed, as direct selling costs have exceeded this revenue in
all periods reported. Advertising revenues are recognized when commercials are aired.
The Company's Newsday business recognizes publication advertising revenue when advertisements are
published. Newsday recognizes circulation revenue for single copy sales as newspapers are distributed,
net of returns. Proceeds from advance billings for home-delivery subscriptions are recorded as deferred
revenue and are recognized as revenue on a pro-rata basis over the term of the subscriptions.
Revenues derived from other sources are recognized when services are provided or events occur.
Multiple-Element Transactions
In the normal course of business, the Company may enter into multiple-element transactions where it is
simultaneously both a customer and a vendor with the same counterparty or in which it purchases
multiple products and/or services, or settles outstanding items contemporaneous with the purchase of a
product or service from a single counterparty. The Company's policy for accounting for each transaction
negotiated contemporaneously is to record each deliverable of the transaction based on its best estimate of
selling price in a manner consistent with that used to determine the price to sell each deliverable on a
standalone basis. In determining the fair value of the respective deliverable, the Company will utilize
quoted market prices (as available), historical transactions or comparable cash transactions.
Gross Versus Net Revenue Recognition
In the normal course of business, the Company is assessed non-income related taxes by governmental
authorities, including franchising authorities (generally under multi-year agreements), and collects such
taxes from its customers. The Company's policy is that, in instances where the tax is being assessed
directly on the Company, amounts paid to the governmental authorities and amounts received from the
customers are recorded on a gross basis. That is, amounts paid to the governmental authorities are
recorded as technical and operating expenses and amounts received from the customer are recorded as
revenues. For the years ended December 31, 2013, 2012 and 2011, the amount of franchise fees included
as a component of net revenue aggregated $137,575, $135,575 and $137,567, respectively.
Technical and Operating Expenses
Costs of revenue related to sales of services are classified as "technical and operating" expenses in the
accompanying statements of income.
Programming Costs
Programming expenses for the Company's video business included in the Cable segment represent fees
paid to programming distributors to license the programming distributed to subscribers. This
programming is acquired generally under multi-year distribution agreements, with rates usually based on