Dish Network 2011 Annual Report Download - page 107

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-13
Sales Taxes
We account for sales taxes imposed on our goods and services on a net basis in our Consolidated Statements of
Operations and Comprehensive Income (Loss). Since we primarily act as an agent for the governmental authorities, the
amount charged to the customer is collected and remitted directly to the appropriate jurisdictional entity.
Income Taxes
We establish a provision for income taxes currently payable or receivable and for income tax amounts deferred to future
periods. Deferred tax assets and liabilities are recorded for the estimated future tax effects of differences that exist
between the book and tax basis of assets and liabilities. Deferred tax assets are offset by valuation allowances when we
believe it is more likely than not that such net deferred tax assets will not be realized.
Accounting for Uncertainty in Income Taxes
From time to time, we engage in transactions where the tax consequences may be subject to uncertainty. We record a
liability when, in management’s judgment, a tax filing position does not meet the more likely than not threshold. For tax
positions that meet the more likely than not threshold, we may record a liability depending on management’s assessment
of how the tax position will ultimately be settled. We adjust our estimates periodically for ongoing examinations by and
settlements with various taxing authorities, as well as changes in tax laws, regulations and precedent. We classify
interest and penalties, if any, associated with our uncertain tax positions as a component of “Interest expense, net of
amounts capitalized” and “Other, net,” respectively.
Fair Value of Financial Instruments
As of December 31, 2011 and 2010, the carrying value for cash and cash equivalents, marketable investment securities,
trade accounts receivable, net of allowance for doubtful accounts, and current liabilities is equal to or approximates fair
value due to their short-term nature or proximity to current market rates.
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
regarding, among other things, credit spreads, and the impact of these factors on the value of the notes. See Note 11 for
the fair value of our long-term debt.
Deferred Debt Issuance Costs
Costs of issuing debt are generally deferred and amortized to interest expense ratably over the terms of the respective notes
(see Note 11).
Revenue Recognition
We recognize revenue when an arrangement exists, prices are determinable, collectibility is reasonably assured and the
goods or services have been delivered.