TeleNav 2012 Annual Report Download - page 82

Table of Contents
TELENAV, INC.
Notes to Consolidated Financial Statements—(Continued)
income in stockholders’ equity. Foreign currency transaction gains and losses are included in our net income for each year. All assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated
at the average monthly exchange rates during the year. Equity transactions are translated using historical exchange rates. Foreign currency transaction
gains (losses) were $(251,000) , $51,000 and $205,000 in fiscal 2013 , 2012 and 2011 , respectively.
Cash equivalents and short-term investments
Cash equivalents consist of highly liquid fixed-income investments with original maturities of three months or less at the time of purchase,
including money market funds. Short-term investments consist of readily marketable securities with a remaining maturity of more than three months
from time of purchase. We classify all of our cash equivalents and short-term investments as “available-for-sale,” as these investments are free of
trading restrictions. These marketable securities are carried at fair value, with the unrealized gains and losses, net of tax, reported as accumulated
other comprehensive income and included as a separate component of stockholders’
equity. Gains and losses are recognized when realized. When we
have determined that an other-than-
temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is recognized
in earnings. Gains and losses are determined using the specific identification method. Our net realized gains were $152,000 , $102,000 and $21,000
in fiscal 2013, 2012, and 2011, respectively.
Concentrations of risk and significant customers
Financial instruments that subject us to significant concentrations of credit risk primarily consist of cash, cash equivalents, short-term
investments and accounts receivable. We maintain our cash, cash equivalents and short-term investments with well-capitalized financial institutions.
Cash equivalents consist primarily of money-market accounts. Our primary customers are wireless carriers, automobile manufacturers and original
equipment manufacturers, or OEMs, and we do not require collateral for accounts receivable. To manage the credit risk associated with accounts
receivable, we evaluate the creditworthiness of our customers. We evaluate our accounts receivable on an ongoing basis to determine those amounts
not collectible. To date, we are not aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to us.
Revenue related to products and services provided through Ford Motor Company, or Ford, comprised 36% , 13% and 6% of revenue for fiscal
2013 , 2012 and 2011, respectively. Receivables due from Ford were 45% and 18% of total accounts receivable at June 30, 2013 and 2012 ,
respectively. Revenue related to services provided through AT&T Mobility LLC., or AT&T, comprised 28% , 35% and 37% of revenue for fiscal
2013 , 2012 and 2011 , respectively. Receivables due from AT&T were 23% and 48% of total accounts receivable at June 30, 2013 and 2012,
respectively. Revenue related to services provided through Sprint Nextel Corporation, or Sprint, comprised 16% , 36% and 41% of revenue for fiscal
2013 , 2012 and 2011 , respectively. No other customer represented 10% of our revenue or 10% of our receivables for any period presented.
Our map and points of interest data have been provided principally through TomTom North America, Inc., or TomTom, and HERE North
America, LLC, formerly known as Navigation Technologies Corporation, a Nokia company, or HERE, in fiscal 2013, 2012 and 2011. To date, we
are not aware of circumstances that may impair either party’s intent or ability to continue providing such services to us.
Fair value of financial instruments
The estimated fair market value of financial instruments, including cash, accounts receivable, accounts payable and accrued expenses,
approximates the carrying values of those instruments due to their relatively short maturities.
We measure certain other financial instruments at fair value on a recurring basis. We have established a hierarchy, which consists of three
levels, for disclosure of the inputs used to determine the fair value of our financial instruments.
Level 1 valuations are based on quoted prices in active markets for identical assets or liabilities.
Level 2 valuations are based on inputs that are observable, either directly or indirectly, other than quoted prices included within Level 1. Such
inputs used in determining fair value for Level 2 valuations include quoted prices in active markets for similar assets or liabilities, quoted prices for
identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities.
Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement.
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