Clearwire 2008 Annual Report Download - page 97

I
nterest Ca
p
ita
l
izatio
n
—We
f
o
ll
ow t
h
e prov
i
s
i
ons o
f
SFAS No. 34,
C
apita
l
ization of Interest Cos
t
,
w
i
t
h
r
espect to our spectrum
li
censes an
d
t
h
ere
l
ate
d
construct
i
on o
f
our networ
ki
n
f
rastructure assets. Cap
i
ta
li
zat
i
on o
f
interest commences with pre-construction period administrative and technical activities, which includes obtainin
g
l
eases, zon
i
ng approva
l
san
db
u
ildi
ng perm
i
ts, an
d
ceases w
h
en t
h
e construct
i
on
i
ssu
b
stant
i
a
ll
y comp
l
ete an
d
ava
il
a
bl
e
f
or use (genera
ll
yw
h
en a mar
k
et
i
s
l
aunc
h
e
d
). Interest
i
s cap
i
ta
li
ze
d
on property, p
l
ant an
d
equ
i
pment,
improvements under construction, and spectrum licenses accounted for as intan
g
ible assets with indefinite useful
lives. Interest capitalization is based on rates applicable to borrowings outstanding during the period and th
e
w
e
igh
te
d
avera
g
e
b
a
l
ance o
f
qua
lifi
e
d
assets un
d
er construct
i
on
d
ur
i
n
g
t
h
e per
i
o
d
. Cap
i
ta
li
ze
di
nterest
i
s reporte
d
as
a cost o
f
t
h
e net
w
or
k
assets an
d
amort
i
ze
d
o
v
er t
h
e use
f
u
l lif
eo
f
t
h
ose assets
.
Com
p
rehensive Los
s
—
Com
p
rehensive loss consists of two com
p
onents, net loss and other com
p
rehensive
i
ncome (
l
oss). Ot
h
er compre
h
ens
i
ve
i
ncome (
l
oss) re
f
ers to revenue, expenses, ga
i
ns an
dl
osses t
h
at un
d
er genera
ll
y
accepted accountin
g
principles are excluded from net loss but recorded as an element of stockholders’ equit
y
. Our
o
ther comprehensive income (loss) is comprised of forei
g
n currenc
y
translation ad
j
ustments from our forei
g
n
s
u
b
s
idi
ar
i
es t
h
at
d
o not use t
h
e U.S.
d
o
ll
ar as t
h
e
i
r
f
unct
i
ona
l
currency an
d
unrea
li
ze
d
ga
i
ns an
dl
osses o
n
marketable securities classified as available-for-sale
.
I
ncome
T
axe
s
—
We account for income taxes in accordance with the provisions of SFAS No. 109,
A
ccountin
g
f
or Income Taxes,w
hi
c
h
we re
f
er to as SFAS No. 109, w
hi
c
h
requ
i
res t
h
at
d
e
f
erre
di
ncome taxes
b
e
d
eterm
i
ne
d
b
ase
d
on t
h
e est
i
mate
df
uture tax e
ff
ects o
f diff
erences
b
et
w
een t
h
e
fi
nanc
i
a
l
statement an
d
tax
b
as
i
so
f
assets an
d
liabilities using the tax rates expected to be in effect when the temporary differences reverse. Deferred tax assets ar
e
also recorded for net operating loss, capital loss, and tax credit carryforwards. Valuation allowances, if any, ar
e
r
ecor
d
e
d
to re
d
uce
d
e
f
erre
d
tax assets to t
h
e amount cons
id
ere
d
more
lik
e
ly
t
h
an not to
b
e rea
li
ze
d
.Wea
l
so app
ly
F
ASB Inter
p
retation No. 48,
A
ccounting
f
or Uncertainty in Income Taxe
s
, which we refer to as FIN 48, which
p
rescribes a recognition threshold that a tax position is required to meet before being recognized in the financial
statements.
N
on-Controllin
g
Interest
s
— Non-controllin
g
interests on the consolidated balance sheets include third-part
y
i
nvestments
i
n ent
i
t
i
es t
h
at we conso
lid
ate,
b
ut
d
o not w
h
o
ll
y own. T
h
e net pre-tax resu
l
ts attr
ib
ute
d
to non-
contro
lli
ng
i
nterest
h
o
ld
ers
i
n conso
lid
ate
d
ent
i
t
i
es are
i
nc
l
u
d
e
di
n non-contro
lli
ng
i
nterest
i
ncome (expense)
i
n our
consolidated statements of o
p
erations. We allocate net loss and other com
p
rehensive income (loss) to non
-
controlling interest owners based on the amounts that would be distributed to the equity interest owners in
accor
d
ance w
i
t
h
t
h
e
i
r app
li
ca
bl
e owners
hi
p percentages. To t
h
e extent t
h
at t
h
e
l
osses app
li
ca
bl
etot
h
e non-
contro
lli
n
gi
nterest owners wou
ld
cause t
h
e non-contro
lli
n
gi
nterest owners to excee
d
t
h
e
i
ro
blig
at
i
on to ma
k
e
g
oo
d
s
uch losses, the amounts are reallocated back to us. We will recover any such losses prior to allocating future
earnings to the non-controlling interest owners
.
Revenue Recognition — We reco
g
n
i
ze revenues
i
n accor
d
ance w
i
t
h
SAB Top
i
c 13, Revenue Recognition
.
Revenue is reco
g
nized when all of the followin
g
conditions exist: (i) persuasive evidence of an arran
g
ement exists
i
nt
h
e
f
orm o
f
an accepte
d
customer contract; (
ii
)
d
e
li
very
h
as occurre
d
,
b
ase
d
on s
hi
pp
i
ng terms, or serv
i
ces
h
ave
b
een ren
d
ere
d
;(
iii
)t
h
epr
i
ce to t
h
e
b
uyer
i
s
fi
xe
d
or
d
eterm
i
na
bl
e, as
d
ocumente
d
on t
h
e customer contract; an
d
(
iv) collectabilit
y
is reasonabl
y
assured.
We pr
i
mar
il
y earn revenue
b
y prov
idi
ng access to our
hi
g
h
-spee
d
w
i
re
l
ess networ
k
.A
l
so
i
nc
l
u
d
e
di
n revenue
are
l
eases o
f
CPE an
d
a
ddi
t
i
ona
l
a
dd
-on serv
i
ces,
i
nc
l
u
di
n
g
persona
l
an
db
us
i
ness ema
il
an
d
stat
i
c Internet Protoco
l
.
Revenue from customers is billed in advance and reco
g
nized ratabl
y
over the contracted service period. Revenue
s
associated with the sale of CPE and other equipment to customers is recognized when title and risk of loss is
t
rans
f
erre
d
to t
h
e customer. S
hi
pp
i
n
g
an
dh
an
dli
n
g
costs
bill
e
d
to customers are c
l
ass
ifi
e
d
as revenue. Act
i
vat
i
on
f
ees c
h
ar
g
e
d
to t
h
e customer are
d
e
f
erre
d
an
d
reco
g
n
i
ze
d
as revenues on a stra
igh
t-
li
ne
b
as
i
s over t
h
e avera
ge
estimated life of the customer relationship of 3.
5
years.
85
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)