Dish Network 2011 Annual Report Download - page 103

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DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-9
contingencies, the useful lives and residual value surrounding our rental library inventory, estimated accruals related to
revenue-sharing titles that are subject to performance guarantees, fair value of financial instruments, fair value of options
granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations,
capital leases, asset impairments, estimates of future cash flows used to evaluate impairments, useful lives of property,
equipment and intangible assets, asset retirement obligations, retailer incentives, programming expenses, subscriber lives
and royalty obligations. Weak economic conditions have increased the inherent uncertainty in the estimates and
assumptions indicated above. Actual results may differ from previously estimated amounts, and such differences may be
material to the Consolidated Financial Statements. Estimates and assumptions are reviewed periodically, and the effects of
revisions are reflected prospectively in the period they occur.
Cash and Cash Equivalents
We consider all liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash
equivalents as of December 31, 2011 and 2010 may consist of money market funds, government bonds, corporate notes and
commercial paper. The cost of these investments approximates their fair value.
Marketable Investment Securities
We currently classify all marketable investment securities as available-for-sale, except for investments accounted for
under the fair value method. We adjust the carrying value of our available-for-sale securities to fair value and report the
related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income
(loss)” within “Total stockholders’ equity (deficit),” net of related deferred income tax. Declines in the fair value of a
marketable investment security which are determined to be “other-than-temporary” are recognized in the Consolidated
Statements of Operations and Comprehensive Income (Loss), thus establishing a new cost basis for such investment. All
changes to our securities accounted for at fair value are reflected in “Other, net” in the Consolidated Statements of
Operations and Comprehensive Income (Loss).
We evaluate our marketable investment securities portfolio on a quarterly basis to determine whether declines in the fair
value of these securities are other-than-temporary. This quarterly evaluation consists of reviewing, among other things:
x the fair value of our marketable investment securities compared to the carrying amount,
x the historical volatility of the price of each security, and
x any market and company specific factors related to each security.
Declines in the fair value of debt and equity investments below cost basis are generally accounted for as follows:
Length of Time
Investment Has Been In a
Continuous Loss Position
Treatment of the Decline in Value
(absent specific factors to the contrary)
Less than six months Generally, considered temporary.
Six to nine months
Evaluated on a case by case basis to determine whether any company or
market-specific factors exist indicating that such decline is other-than-
temporary.
Greater than nine months Generally, considered other-than-temporary. The decline in value is
recorded as a charge to earnings.