TripAdvisor 2011 Annual Report Download - page 81

Table of Contents
Display and Other Advertising . We recognize display advertising revenue ratably over the advertising period or upon delivery of
advertising impressions, depending on the terms of the advertising contract. Subscription-based revenue is recognized ratably over the related
subscription period. We recognize revenue from all other sources either upon delivery or when we provide the service.
Deferred revenue, which primarily relates to our subscription-based programs, is recorded when payments are received in advance of our
performance as required by the underlying agreements.
Cash and Cash Equivalents and Short-Term Investments
Our cash and cash equivalents consist primarily of cash and liquid financial instruments, including money market funds, with maturities of
90 days or less when purchased. Prior to Spin-
Off, our domestic cash receipts had been transferred to Expedia, which had historically funded our
domestic disbursement accounts as required. Transfers of cash between TripAdvisor and Expedia resulted in increases or decreases to our net
related-party balance. In connection with the Spin-Off this intercompany balance with Expedia was extinguished and any subsequent cash
transfers related to business operations between TripAdvisor and Expedia have ceased.
At December 31, 2010 our short-term investments were classified as available for sale and included time deposit investments with original
maturities of greater than 90 days and remaining maturities of less than one year. As of December 31, 2011 we have no short term investments.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are generally due within 30 days and are recorded net of an allowance for doubtful accounts. We consider accounts
outstanding longer than the contractual payment terms as past due. We determine our allowance by considering a number of factors, including
the length of time trade accounts receivable are past due, previous loss history, a specific customer’s ability to pay its obligations to us, and the
condition of the general economy and industry as a whole.
Property and Equipment, Including Website and Software Development Costs
We record property and equipment at cost, net of accumulated depreciation. We capitalize certain costs incurred during the application
development stage related to the development of websites and internal use software. Capitalized costs include internal and external costs, if
direct and incremental, and deemed by management to be significant. We expense costs related to the planning and post-implementation phases
of software and website development as these costs are incurred. Maintenance and enhancement costs (including those costs in the post-
implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or
software resulting in added functionality, in which case the costs are capitalized.
We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is three to five years for
computer equipment, capitalized software and website development and furniture and other equipment. We depreciate leasehold improvement
using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease.
Recoverability of Goodwill and Indefinite
-Lived Intangible Assets
Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition
date. We assess goodwill and indefinite-lived intangible assets, neither of which is amortized, for impairment annually as of October 1, or more
frequently, if events and circumstances indicate impairment may have occurred. We have one reportable segment. The segment is determined
based on how our chief operating decision maker manages our business, makes operating decisions and evaluates operating performance.
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