Dish Network 2008 Annual Report Download - page 96

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-14
Accounting for Uncertainty in Income Taxes
We adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes –
an Interpretation of FASB Statement No. 109” (“FIN 48”), on January 1, 2007. FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance
with SFAS 109 and prescribes a recognition threshold and measurement process for financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also
provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosure and transition.
Fair Value of Financial Instruments
Fair values for our publicly traded debt securities are based on quoted market prices. The fair values of our
private debt is estimated based on an analysis in which we evaluate market conditions, related securities,
various public and private offerings, and other publicly available information. In performing this analysis,
we make various assumptions, among other things, regarding credit spreads, and the impact of these factors
on the value of the notes.
Deferred Debt Issuance Costs
Costs of issuing debt are generally deferred and amortized to interest expense over the terms of the respective
notes (Note 9).
Revenue Recognition
We recognize revenue when an arrangement exists, prices are determinable, collectibility is reasonably
assured and the goods or services have been delivered. Revenue from our subscription television services
is recognized when programming is broadcast to subscribers. Programming payments received from
subscribers in advance of the broadcast or service period are recorded as “Deferred revenue and other” in
the Consolidated Balance Sheets until earned. For certain of our promotions relating to our receiver systems,
subscribers are charged an upfront fee. A portion of this fee may be deferred and recognized over 48 to 60
months, depending on whether the fee is received from existing or new subscribers. Revenue from
advertising sales is recognized when the related services are performed.
Subscriber fees for equipment rental, additional outlets and fees for receivers with multiple tuners, high
definition (“HD”) receivers, digital video recorders (“DVRs”), and HD DVRs, our DishHOME Protection
Plan and other services are recognized as revenue, monthly as earned. Revenue from equipment sales and
equipment upgrades are recognized upon shipment to customers.
Revenue from equipment sales to AT&T, Inc. (“AT&T”) pursuant to our original agreement with AT&T is
deferred and recognized over the estimated average co-branded subscriber life. Revenue from installation
and certain other services performed at the request of AT&T is recognized upon completion of the
services. Further, development and implementation fees received from AT&T will continue to be
recognized over the estimated average subscriber life of all subscribers acquired under both the original
and revised agreements with AT&T.
Accounting for certain of our existing and new subscriber promotions which include programming discounts
and subscriber rebates falls under the scope of EITF Issue No. 01-9, “Accounting for Consideration Given by
a Vendor to a Customer (Including a Reseller of the Vendor’s Capital Products)” (“EITF 01-9”). In
accordance with EITF 01-9, programming revenues under these promotions are recorded as earned at the
discounted monthly rate charged to the subscriber. See “Subscriber Acquisition Promotions” below for
discussion regarding the accounting for costs under these promotions.