Clearwire 2008 Annual Report Download - page 67

Th
e owne
dli
censes
i
nt
h
eUn
i
te
d
States an
di
nternat
i
ona
lly
t
h
at
h
ave a trac
k
recor
d
o
f
renewa
l
are accounte
d
for as intan
g
ible assets with indefinite lives in accordance with the provisions of SFAS No. 142. In accordance with
S
FAS No. 142,
i
ntang
ibl
e assets w
i
t
hi
n
d
e
fi
n
i
te use
f
u
lli
ves are not amort
i
ze
db
ut must
b
e assesse
df
or
i
mpa
i
rmen
t
annua
ll
y or more
f
requent
l
y
if
an event
i
n
di
cates t
h
at t
h
e asset m
i
g
h
t
b
e
i
mpa
i
re
d.
O
wne
dli
censes
i
nternat
i
ona
ll
yt
h
at
d
o not
h
ave a trac
k
recor
d
o
f
renewa
l
are accounte
df
or as
l
ong-
li
ve
d
asset
s
and are assessed for impairment whenever events or chan
g
es in circumstances indicate that the carr
y
in
g
amount of
an asset ma
y
not be recoverable, as required b
y
SFAS No. 144.
We account for the spectrum lease arran
g
ements as executor
y
contracts which are similar to operatin
g
leases
.
F
or leases containing scheduled rent escalation clauses we record minimum rental payments on a straight-line basi
s
over t
h
e terms o
f
t
h
e
l
eases,
i
nc
l
u
di
ng t
h
e renewa
l
per
i
o
d
s as appropr
i
ate. For
l
eases
i
nvo
l
v
i
ng s
i
gn
ifi
cant up-
f
ron
t
p
a
y
ments, we account for such pa
y
ments as prepaid spectrum lease costs
.
De
f
erre
d
Tax Asset Va
l
uation A
ll
owanc
e
A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either
e
xp
i
re
b
e
f
ore we are a
bl
e to rea
li
ze t
h
e
i
r
b
ene
fi
t, or t
h
at
f
uture
d
e
d
uct
ibili
t
yi
s uncerta
i
n. In accor
d
ance w
i
t
h
S
FAS No. 109, Accounting
f
or Income Taxes, we record net deferred tax assets to the extent we believe these assets
w
ill more likely than not be realized. In making such determination, we consider all available positive and negativ
e
ev
id
ence,
i
nc
l
u
di
ng our
li
m
i
te
d
operat
i
ng
hi
story, sc
h
e
d
u
l
e
d
reversa
l
so
fd
e
f
erre
d
tax
li
a
bili
t
i
es, pro
j
ecte
df
utur
e
t
axable income/loss, tax plannin
g
strate
g
ies and recent financial performance. As it relates to the U.S. tax
j
urisdiction, we determined that our temporar
y
taxable difference associated with our investment in Clearwir
e
Commun
i
cat
i
ons LLC w
ill
reverse w
i
t
hi
nt
h
e reversa
l
per
i
o
d
so
fi
ts
d
e
f
erre
d
tax assets an
d
accor
di
ng
l
y represent
s
r
elevant future taxable income. We have recorded a valuation allowance for net deferred tax assets, which wa
s
approximatel
y
$349.0 million and $98.7 million as of December 31, 2008 and 2007, respectivel
y
.
I
n
ves
tm
e
nt
s
S
FAS No. 115
,
Accounting for Certain Investments in De
b
tan
d
Equity Securitie
s
,
and SAB No. 59
,
N
on
-
c
urrent Mar
k
eta
bl
e Equity Securities, prov
id
egu
id
ance on
d
eterm
i
n
i
ng w
h
en an
i
nvestment
i
sot
h
er-t
h
an-tem
-
p
oraril
y
impaired. We classif
y
marketable debt and equit
y
securities that are available for current operations as
sh
ort-term ava
il
a
bl
e-
f
or-sa
l
e
i
nvestments, w
hi
c
h
are state
d
at
f
a
i
rva
l
ue. Unrea
li
ze
d
ga
i
ns an
dl
osses are recor
d
e
d
wi
t
hi
n accumu
l
ate
d
ot
h
er compre
h
ens
i
ve
i
ncome (
l
oss). Losses are reco
g
n
i
ze
d
w
h
en a
d
ec
li
ne
i
n
f
a
i
rva
l
ue
i
s
determined to be other-than-temporar
y
. Realized
g
ains and losses are determined on the basis of the specifi
c
i
dentification method. We review our short-term and long-term investments on an ongoing basis for indicators of
ot
h
er-t
h
an-temporar
yi
mpa
i
rment, an
d
t
hi
s
d
eterm
i
nat
i
on requ
i
res s
ig
n
ifi
cant
j
u
dg
ment.
We
h
ave an
i
nvestment port
f
o
li
o compr
i
se
d
o
f
U.S. treasur
i
es an
d
auct
i
on rate secur
i
t
i
es. T
h
eva
l
ue o
f
t
h
ese
s
ecurities is sub
j
ect to market volatilit
y
for the period we hold these investments and until their sale or maturit
y
.We
r
eco
g
nize realized losses when declines in the fair value of our investments below their cost basis are
j
ud
g
ed to b
e
ot
h
er-t
h
an-temporary. In
d
eterm
i
n
i
ng w
h
et
h
er a
d
ec
li
ne
i
n
f
a
i
rva
l
ue
i
sot
h
er-t
h
an-temporary, we cons
id
er var
i
ou
s
f
actors
i
nc
l
u
di
n
g
mar
k
et pr
i
ce (w
h
en ava
il
a
bl
e),
i
nvestment rat
i
n
g
s, t
h
e
fi
nanc
i
a
l
con
di
t
i
on an
d
near-term prospect
s
of the issuer, the len
g
th of time and the extent to which the fair value has been less than our cost basis, and our inten
t
an
d
a
bili
ty to
h
o
ld
t
h
e
i
nvestment unt
il
matur
i
ty or
f
or a per
i
o
d
o
f
t
i
me su
ffi
c
i
ent to a
ll
ow
f
or any ant
i
c
i
pate
d
r
ecover
yi
n mar
k
et va
l
ue. We ma
k
es
ig
n
ifi
cant
j
u
dg
ments
i
n cons
id
er
i
n
g
t
h
ese
f
actors. I
fi
t
i
s
j
u
dg
e
d
t
h
at a
d
ec
li
ne
i
n
f
a
i
rva
l
ue
i
sot
h
er-t
h
an-temporar
y
,t
h
e
i
nvestment
i
sva
l
ue
d
at t
h
e current est
i
mate
df
a
i
rva
l
ue an
d
a rea
li
ze
dl
oss
eq
ual to the decline is reflected in the consolidated statement of o
p
erations
.
55
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
MANAGEMENT’
S
DI
S
CU
SS
ION AND ANALY
S
I
S
OF FINANCIAL CONDITION
A
ND RESULTS OF OPERATIONS — (Continued
)