Support.com 2005 Annual Report Download - page 48

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SUPPORTSOFT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
one issuer and in any one country except the United States. We are exposed to credit risks in the event of default by the issuers to the
extent of the amount recorded on the balance sheet. The credit risk in our trade accounts receivable is substantially mitigated by our
credit evaluation process, reasonably short collection terms and because the Company sells its products primarily to large
organizations in diversified industries.
Trade Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount. We perform evaluations of our customers’ financial condition
and generally do not require collateral. We make judgments as to our ability to collect outstanding receivables and provide allowances
for the portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant
outstanding invoices. For those invoices not specifically provided for, provisions are recorded at differing rates, based upon the age of
the receivable. In determining these percentages, we analyze our historical collection experience and current payment trends. If the
historical data we use to calculate the allowance for doubtful accounts does not reflect the future ability to collect outstanding
receivables, additional provisions for doubtful accounts may be needed and the future results of operations could be materially
affected.
As of December 31, 2005, two customers in aggregate accounted for approximately 40% of total accounts receivable, net. The
following table lists the customer concentrations for accounts receivable, net as of December 31, 2005 and 2004:
Cash, Cash Equivalents and Short-Term Investments
Balance at
Beginning
of Period
Charged/
(Recovery) to
Costs and
Expenses
Write-
offs
Balance at
End
of Period
Allowance for doubtful accounts:
Year ended December 31, 2003
924
312
(501)
735
Year ended December 31, 2004
735
(134)
(154)
447
Year ended December 31, 2005
447
209
(360)
296
% of Total
Accounts Receivable,
Net Years Ended
December 31,
2005
2004
Customer A
—
33%
Customer B
—
18%
Customer C
—
11%
Customer D
20%
—
Customer E
20%
—
SupportSoft considers all liquid instruments with an original maturity at the date of purchase of ninety days or less to be cash
equivalents. At December 31, 2005, cash equivalents and short-term investments consist primarily of money market funds,
commercial paper, auction-backed securities, corporate bonds and notes and treasury bills issued by the United States government and
its agencies. Our cash equivalents and short-term investments are classified as available-for-sale as of the respective balance sheet
dates, and are reported at fair value with unrealized gains and losses included in accumulated other comprehensive income within
stockholders’ equity on the consolidated balance sheet. Realized gains and losses and declines in value judged to
46