NetZero 2011 Annual Report Download - page 117

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING
PRONOUNCEMENTS (Continued)
Accounting Policies
Segments —The Company complies with the reporting requirements of Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") 280, Segment Reporting . Management measures and reviews segment performance for internal reporting
purposes in accordance with the "management approach" defined in ASC 280. The operating segments identified in Note 2 below are the
segments of the Company for which separate financial information is available and for which segment results are regularly reviewed by the
Company's chief operating decision maker in deciding how to allocate resources and assess performance. Effective in the first quarter of 2011,
the Company modified how it reports segment information to the chief operating decision maker. The Company's segment reporting now
separately reports unallocated corporate expenses. Previously, such expenses were fully allocated to the Company's reportable segments. The
Company has disclosed revised prior period results to conform to the current year presentation.
Cash and Cash Equivalents —The Company considers cash equivalents to be only those investments which are highly liquid, readily
convertible to cash and which have a maturity date within ninety days from the date of purchase.
At December 31, 2011 and 2010, the Company's cash and cash equivalents were maintained primarily with major financial institutions and
brokerage firms in the United States ("U.S.") and the United Kingdom ("U.K."). Deposits with these institutions and firms generally exceed the
amount of insurance provided on such deposits.
Accounts Receivable, including Financing Receivables —The Company's accounts receivable are derived primarily from revenues earned
from advertising customers and floral network members located in the U.S. and the U.K., and pay accounts. The Company extends credit based
upon an evaluation of the customer's financial condition and, generally, collateral is not required. The Company maintains an allowance for
doubtful accounts receivable based upon the expected collectibility of accounts receivable and, to date, such losses have been within
management's expectations.
The Company evaluates specific accounts receivable where information exists that the customer may have an inability to meet its financial
obligations. In these cases, based on the best available facts and circumstances, a specific allowance is recorded for that customer against
amounts due to reduce the receivable to the amount that is expected to be collected. These specific allowances are re-evaluated and adjusted as
additional information is received that impacts the amount of the allowance. Also, an allowance is established for all customers based on the
aging of the receivables. If circumstances change (i.e., higher than expected delinquencies or an unexpected material adverse change in a
customer's ability to meet its financial obligations), the estimates of the recoverability of amounts due to the Company are adjusted.
The Company has financing receivables related to equipment sales in the FTD segment. The Company records all financing receivables at
fair value and amortizes such receivables to stated value. The Company recognizes interest income as earned. The Company assesses credit
quality indicators based on whether financing receivables are current or past due. Financing receivables are placed on nonaccrual status, with
interest no longer accruing, when a floral network member ceases to be a member. The Company would not expect to resume the accrual of
interest income unless the member becomes active again and such member's receivable balance is current. A financing receivable is
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