ServiceMagic 2012 Annual Report Download - page 41

Table of Contents
the grant date as the fair value of IAC common stock and expensed as non-cash compensation over the vesting term when the performance
targets are considered probable of being achieved.
Marketable Securities
The Company invests in certain marketable securities, which primarily consist of short-to-intermediate-term debt securities issued by
investment grade corporate issuers. The unrealized gains and losses on marketable securities, net of tax, are included in accumulated other
comprehensive income as a separate component of shareholders' equity. The specific-identification method is used to determine the cost of
securities sold and the amount of unrealized gains and losses reclassified out of accumulated other comprehensive income into earnings.
The Company employs a methodology that considers available evidence in evaluating potential other-than-temporary impairments of its
investments. Investments are considered to be impaired when a decline in fair value below the amortized cost basis is determined to be other-
than-temporary. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair
value has been less than the amortized cost basis, the financial condition and near-term prospects of the issuer, and whether it is not more likely
than not that the Company will be required to sell the security before the recovery of the amortized cost basis, which may be maturity. If a
decline in fair value is determined to be other-than-temporary, an impairment charge is recorded in current earnings and a new cost basis in the
investment is established. Future events may result in reconsideration of the nature of losses as other-than-temporary and market and other
factors may cause the value of the Company's investment in marketable securities to decline. During 2012, the Company recorded an other-than-
temporary impairment charge of $8.7 million related to one of its long-term marketable equity securities. This charge is more fully described
above in "Results of Operations for the Years Ended December 31, 2012, 2011 and 2010." During 2011, the Company did not consider any of its
marketable securities to be other-than-temporarily impaired.
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