Support.com 2006 Annual Report Download - page 53

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SUPPORTSOFT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 1. Organization and Summary of Significant Accounting Policies (Continued)
Cash, Cash Equivalents and Marketable Securities
SupportSoft considers all liquid instruments with an original maturity at the date of purchase of ninety days or less to be cash
equivalents. Cash equivalents and marketable securities consist primarily of money market funds, commercial paper, auction rate
securities, corporate bonds and notes and treasury bills issued by the United States government and its agencies. Our cash equivalents
and marketable securities are classified as available−for−sale, and are reported at fair value with unrealized gains and losses included
in accumulated other comprehensive income within stockholders’ equity on the consolidated balance sheets. Realized gains and losses
and declines in value judged to be other than temporary on available−for−sale securities are included in other income (expense), net in
the consolidated statements of operations. The amortized cost of debt securities is adjusted for amortization of premiums and accretion
of discounts to maturity, both of which are included in interest income. SupportSoft recorded net unrealized losses on
available−for−sale securities of $54,000 and $117,000 as of December 31, 2006 and 2005, respectively. Realized gains and losses are
recorded using the specific identification method and were immaterial during the years ending December 31, 2006, 2005, and 2004.
We monitor our investments for impairment on a quarterly basis and determine whether a decline in fair value is
other−than−temporary by considering factors such as current economic and market conditions, the credit rating of the security’s
issuer, the length of time an investment’s fair value has been below our carrying value, and our ability and intent to hold investments
to maturity. If an investment’s decline in fair value is deemed to be other−than−temporary, we reduce its carrying value to its
estimated fair value, as determined based on quoted market prices or liquidation values. Declines in value judged to be
other−than−temporary, if any, are recorded in operations as incurred.
The following is a summary of available−for−sale securities (in thousands):
For the Year Ended December 31, 2006
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses Fair Value
Cash $ 2,372 $ — $ — $ 2,372
Money market fund 22 — — 22
Commercial paper 35,390 — (30) 35,360
Federal agencies 2,000 — (1) 1,999
Corporate bonds 31,511 — (23) 31,488
Auction rate securities 48,650 — — 48,650
$ 119,945 $ — $ (54) $ 119,891
Classified as:
Cash and cash equivalents $ 15,372 $ — $ (3) $ 15,369
Marketable securities 104,573 — (51) 104,522
$ 119,945 $ — $ (54) $ 119,891
49
Source: SUPPORTSOFT INC, 10−K, March 16, 2007