Dish Network 2015 Annual Report Download - page 92

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New Accounting Pronouncements
Revenue from Contracts with Customers. On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Update 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers. This converged
standard on revenue recognition was issued jointly with the International Accounting Standards Board (“IASB”) to improve
financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting
Standards (“IFRS”). ASU 2014-09 provides a framework for revenue recognition that replaces most existing GAAP
revenue recognition guidance when it becomes effective. ASU 2014-09 allows for either a full retrospective or modified
retrospective adoption. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements
and related disclosures. We have not yet selected an adoption method nor have we determined the effect of the standard
on our ongoing financial reporting. The new standard could impact revenue and cost recognition for a significant number
of our contracts, as well as our business processes and information technology systems. As a result, our evaluation of the
effect of the new standard will likely extend over several future periods. On July 9, 2015, the FASB approved a one year
deferral on the effective date for implementation of this standard, which changed the effective date for us to January 1,
2018.
Recognition and Measurement of Financial Assets and Financial Liabilities. In January 2016, the FASB issued
ASU 2016-01 (“ASU 2016-01”), Recognition and Measurement of Financial Assets and Financial Liabilities, which
amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This
amendment requires all equity investments to be measured at fair value with changes in the fair value recognized through
net income (other than those accounted for under equity method of accounting or those that result in consolidation of the
investee). This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods
within those fiscal years. We are evaluating the impact the adoption of ASU 2016-01 will have on our consolidated
financial statements.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risks Associated With Financial Instruments
Our investments and debt are exposed to market risks, discussed below.
Cash, Cash Equivalents and Current Marketable Investment Securities
As of December 31, 2015, our cash, cash equivalents and current marketable investment securities had a fair value of
$1.611 billion. Of that amount, a total of $1.352 billion was invested in: (a) cash; (b) money market funds; (c) VRDNs
convertible into cash at par value plus accrued interest generally in five business days or less; (d) debt instruments of the
United States Government and its agencies; (e) commercial paper and corporate notes with an overall average maturity
of less than one year and rated in one of the four highest rating categories by at least two nationally recognized statistical
rating organizations; and/or (f) instruments with similar risk, duration and credit quality characteristics to the commercial
paper and corporate obligations described above. The primary purpose of these investing activities has been to preserve
principal until the cash is required to, among other things, continue investing in our business, pursue acquisitions and
other strategic transactions, fund ongoing operations, repay debt obligations and expand our business. Consequently, the
size of this portfolio can fluctuate significantly as cash is received and used in our business for these or other purposes.
The value of this portfolio is negatively impacted by credit losses; however, this risk is mitigated through diversification
that limits our exposure to any one issuer.
Interest Rate Risk
A change in interest rates would affect the fair value of our cash, cash equivalents and current marketable investment
securities portfolio; however, we normally hold these investments to maturity. Based on our December 31, 2015 current
non-strategic investment portfolio of $1.352 billion, a hypothetical 10% change in average interest rates would not have
a material impact on the fair value due to the limited duration of our investments.