Support.com 2009 Annual Report Download - page 55

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Table of Contents
SUPPORT.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
tax effects, were $1.2 million and $962,000 as of December 31, 2009 and 2008, respectively, and accumulated unrealized gains (losses) on investments, net of
tax effect, were $0.1 million and $1.6 million as of December 31, 2009 and 2008, respectively.
Comprehensive Loss
Comprehensive net income/loss includes the impact of foreign currency translation adjustments and changes in the fair value of available-for-sale
securities. The following are the components of comprehensive loss (in thousands):
For the years ended December 31,
2009 2008 2007
Net loss $ (14,577) $ (19,106) $ (21,369)
Net unrealized gain/(loss) on available-for-sale securities 1,518 (1,600) 75
Foreign currency translation gain/(loss) (210) (169) (96)
Total comprehensive income/(loss) $ (13,269) $ (20,875) $ (21,390)
Income tax provision netted against unrealized gain (loss) on available-for-sale securities $ — $ — $ —
Income tax provision (benefit) netted against foreign currency translation loss $ 21 $ 10 $ 46
Stock-Based Compensation
We apply the provisions of ASC 718 (formerly SFAS 123R) which requires the measurement and recognition of compensation expense for all stock-based
payment awards, including grants of stock and options to purchase stock, made to employees and directors based on estimated fair values.
Determining Fair Value
Valuation and Attribution Method: We estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model. Stock
options vest on a graded schedule; however we recognize the expense on a straight-line basis over the requisite service period of the entire award, net of
estimated forfeitures and subject to the minimum expense requirements of ASC 718. These limitations require that on any date the compensation cost recognized
is at least equal to the portion of the grant-date fair value of the award that is vested at that date.
Risk-free Interest Rate: We base our risk-free interest rate upon the yield currently available on US Treasury zero coupon issues for the expected term of
the employee stock options.
Expected Term: Our expected term represents the period that our stock options are expected to be outstanding and is determined based on historical
experience of similar stock options considering the contractual terms of the stock options, vesting schedules and expectations of future employee behavior.
Expected Volatility: Our expected volatility represents the amount by which the stock price is expected to fluctuate throughout the period that the stock
option is outstanding. We base our expected volatility on historical data.
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Source: Support.com, Inc., 10-K, March 12, 2010 Powered by Morningstar® Document Research℠