Shutterfly 2014 Annual Report Download - page 86

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revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration for which the
entity expects to be entitled in exchange for those goods or services. This guidance will be effective for the
Company beginning January 1, 2017 and can be applied either retrospectively to each period presented or
as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the impact of
adopting this new accounting standard on its financial statements.
In August 2014, the FASB issued new guidance related to the disclosures around going concern. The
new standard provides guidance around management’s responsibility to evaluate whether there is
substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote
disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2016. Early adoption is permitted. The adoption of this standard is not
expected to have a material impact on the Company’s financial statements.
Note 3 — Balance Sheet Components
Intellectual Property Prepaid Royalties
Total amortization for these license agreements in 2014 and 2013 were $1.6 million and $1.5 million,
respectively. As of December 31, 2014, the Company had a balance of $8.3 million in unamortized prepaid
royalties. Amortization of these licenses is estimated as follows (in thousands):
Year Ending:
2015 .............................................................. $ 1,262
2016 .............................................................. 854
2017 .............................................................. 799
2018 .............................................................. 799
2019 .............................................................. 676
Thereafter .......................................................... 3,861
$ 8,251
Prepaid Expenses and Other Current Assets
December 31,
2014 2013
(in thousands)
Deferred costs ............................................. $ 6,911 $ 4,915
Prepaid service contracts — current portion ........................ 6,754 5,044
Other prepaid expenses and current assets ......................... 11,318 11,301
$ 24,983 $ 21,260
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