Comcast 2015 Annual Report Download - page 154

NBCUniversal Media, LLC
Note 2: Accounting Policies
Our consolidated financial statements are prepared in accordance with GAAP, which requires us to select
accounting policies, including in certain cases industry-specific policies, and make estimates that affect the
reported amount of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets
and contingent liabilities. Actual results could differ from these estimates. We believe that the judgments and
related estimates for the following items are critical in the preparation of our consolidated financial state-
ments:
• revenue recognition (see below)
• film and television costs (see Note 6)
• goodwill and intangible assets (see Note 9)
In addition, the following accounting policies are specific to the industries in which we operate:
• capitalization and amortization of film and television costs (see Note 6)
Information on our other accounting policies and methods that are used in the preparation of our con-
solidated financial statements are included, where applicable, in their respective footnotes that follow. Below
is a discussion of accounting policies and methods used in our consolidated financial statements that are not
presented within other footnotes.
Revenue Recognition
Cable Networks and Broadcast Television Segments
Our Cable Networks segment generates revenue primarily from the distribution of our cable network program-
ming to multichannel video providers, from the sale of advertising on our cable networks and related digital
media properties, from the licensing of our owned programming through various distribution platforms, from
the sale of our owned programming through digital distribution services such as iTunes, and from the pro-
gramming our cable production studio sells to third-party networks and subscription video on demand
services. Our Broadcast Television segment generates revenue primarily from the sale of advertising on our
broadcast networks, owned local broadcast television stations and related digital media properties, from the
licensing of our owned programming through various distribution platforms, including to cable and broadcast
networks, from the fees received under retransmission consent agreements and from the programming our
broadcast television production studio sells to third-party networks and subscription video on demand serv-
ices. We recognize revenue from distributors as programming is provided, generally under multiyear
distribution agreements. From time to time, the distribution agreements expire while programming continues
to be provided to the distributor based on interim arrangements while the parties negotiate new contract
terms. Revenue recognition is generally limited to current payments being made by the distributor, typically
under the prior contract terms, until a new contract is negotiated, sometimes with effective dates that affect
prior periods. Differences between actual amounts determined upon resolution of negotiations and amounts
recorded during these interim arrangements are recorded in the period of resolution.
Advertising revenue for our Cable Networks and Broadcast Television segments is recognized in the period in
which commercials are aired or viewed. In some instances, we guarantee audience ratings for the commer-
cials. To the extent there is a shortfall in the ratings that were guaranteed, a portion of the revenue is deferred
until the shortfall is settled, primarily by providing additional advertising units. We recognize revenue from the
licensing of our owned programming and programming produced by our studios for third parties when the
content is available for use by the licensee, and when certain other conditions are met. When license fees
include advertising time, we recognize the component of revenue associated with the advertisements when
they are aired or viewed.
151 Comcast 2015 Annual Report on Form 10-K