Comcast 2013 Annual Report Download - page 78

Table of Contents
Our estimates of ultimate revenue for films generally include revenue from all sources that are expected to be earned within 10
years from the date of a film’
s initial release. These estimates are based on the historical performance of similar content, as well as
factors unique to the content itself. The most sensitive factor affecting our estimate of ultimate revenue for a film intended for
theatrical release is the film’
s theatrical performance, as subsequent revenue from the licensing and sale of a film has historically
exhibited a high correlation to its theatrical performance. Upon a film’
s release, our estimates of revenue from succeeding markets,
including home entertainment and other distribution platforms, are revised based on historical relationships and an analysis of
current market trends.
With respect to television series or other owned television programming, the most sensitive factor affecting our estimate of ultimate
revenue is whether the series can be successfully licensed beyond its initial license. Initial estimates of ultimate revenue are limited
to the amount of revenue contracted for each episode under the initial license. Once it is determined that a series can be licensed
for subsequent platforms, revenue estimates for these platforms, such as U.S. and international syndication, home entertainment,
and other distribution platforms, are included in ultimate revenue. In the case of television series and owned television
programming, revenue estimates for produced episodes include revenue expected to be earned within 10 years of delivery of the
initial episode or, if still in production, 5 years from the delivery of the most recent episode, if later.
Capitalized film and television costs, as well as stage play production costs, are subject to impairment testing when certain
triggering events are identified. If the fair value of a production falls below its unamortized cost, we would record an adjustment for
the amount by which the unamortized capitalized costs exceed the production’
s fair value. The fair value assessment is generally
based on estimated future discounted cash flows, which are supported by our internal forecasts. Adjustments to capitalized film and
stage play production costs of $167 million and $161 million were recorded in 2013 and 2012, respectively.
Income Taxes
We base our provision for income taxes on our current period income, changes in our deferred income tax assets and liabilities,
income tax rates, changes in estimates of our uncertain tax positions, and tax planning opportunities available in the jurisdictions in
which we operate. We prepare and file tax returns based on our interpretation of tax laws and regulations, and we record estimates
based on these judgments and interpretations.
From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty. In these cases, we
evaluate our tax positions using the recognition threshold and the measurement attribute in accordance with the accounting
guidance related to uncertain tax positions. Examples of these transactions include business acquisitions and dispositions,
including consideration paid or received in connection with these transactions, and certain financing transactions. Significant
judgment is required in assessing and estimating the tax consequences of these transactions. We determine whether it is more
-
likely-than-
not that a tax position will be sustained on examination, including the resolution of any related appeals or litigation
processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-
not
recognition threshold, we presume that the position will be examined by the appropriate taxing authority that has full knowledge of
all relevant information. A tax position that meets the more-likely-than-
not recognition threshold is measured to determine the
amount of benefit to be recognized in our financial statements. The tax position is measured at the largest amount of benefit that
has a greater than 50% likelihood of being realized when the position is ultimately resolved.
We adjust our estimates periodically to reflect changes in circumstances in ongoing examinations by and settlements with the
various taxing authorities, as well as changes in tax laws, regulations and precedent. We believe that adequate accruals have been
made for income taxes. When uncertain tax positions are ultimately
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Comcast 2013 Annual Report on Form 10
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