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Weclassifyourmarketabledebtsecuritiesaseithershort-termorlong-termbasedoneachinstrument’sunderlyingcontractualmaturitydateandasto
whetherandwhenweintendtosellaparticularsecuritypriortoitsmaturitydate.Marketabledebtsecuritieswithmaturitiesgreaterthan90daysatthedateof
purchaseand12monthsorlessremainingatthebalancesheetdatewillbeclassifiedasshort-termandmarketabledebtsecuritieswithmaturitiesgreaterthan12
monthsfromthebalancesheetdatewillgenerallybeclassifiedaslong-term.Weclassifyourmarketableequitysecurities,limitedtomoneymarketfundsand
mutualfunds,aseithershort-termorlong-termbasedonthenatureofeachsecurityanditsavailabilityforuseincurrentoperations.Ourmarketabledebtand
equitysecuritiesarecarriedatfairvalue,withtheunrealizedgainsandlosses,netoftaxes,reportedinaccumulatedothercomprehensiveincome(loss)asa
componentofstockholders’equity.Fairvaluesaredeterminedforeachindividualsecurityintheinvestmentportfolio.
Realizedgainsandlossesonthesaleofsecuritiesaredeterminedbyspecificidentificationofeachsecurity’scostbasis.Wemaysellcertainofour
marketablesecuritiespriortotheirstatedmaturitiesforstrategicreasonsincluding,butnotlimitedto,anticipationofcreditdeteriorationandliquidityandduration
management.Theweightedaveragematurityofourtotalinvestedcashshallnotexceed18months,andnosecurityshallhaveafinalmaturitydategreaterthan
threeyears,accordingtoourinvestmentpolicy.
Wecontinuallyreviewouravailableforsalesecuritiestodeterminewhetheradeclineinfairvaluebelowthecarryingvalueisotherthantemporary.When
evaluatinganinvestmentforother-than-temporaryimpairment,wereviewfactorssuchasthelengthoftimeandextenttowhichfairvaluehasbeenbelowitscost
basis,thefinancialconditionoftheissuerandanychangesthereto,andourintenttosell,orwhetheritismorelikelythannotitwillberequiredtosellthe
investmentbeforerecoveryoftheinvestment’scostbasis.Onceadeclineinfairvalueisdeterminedtobeotherthantemporary,animpairmentchargeisrecorded
andanewcostbasisintheinvestmentisestablished.Ifwedonotintendtosellthedebtsecurity,butitisprobablethatwewillnotcollectallamountsdue,then
onlytheimpairmentduetothecreditriskwouldberecognizedinearningsandtheremainingamountoftheimpairmentwouldberecognizedinaccumulatedother
comprehensivelosswithinstockholders’equity.
Cashconsistsofcashdepositsheldinglobalfinancialinstitutions.
Fair Value Measurements
Weapplyfairvalueaccountingforallfinancialassetsandliabilitiesandnon-financialassetsandliabilitiesthatarerecognizedordisclosedatfairvaluein
thefinancialstatementsonarecurringbasis.Wemeasureassetsandliabilitiesatfairvaluebasedontheexpectedexitprice,whichistheamountthatwouldbe
receivedonthesaleofanassetoramountpaidtotransferaliability,asthecasemaybe,inanorderlytransactionbetweenmarketparticipantsintheprincipalor
mostadvantageousmarketinwhichwewouldtransact.Assuch,fairvaluemaybebasedonassumptionsthatmarketparticipantswoulduseinpricinganassetor
liabilityatthemeasurementdate.Theauthoritativeguidanceonfairvaluemeasurementsestablishesaconsistentframeworkformeasuringfairvalueoneithera
recurringornonrecurringbasiswherebyinputs,usedinvaluationtechniques,areassignedahierarchicallevel.Thefollowingarethehierarchicallevelsofinputsto
measurefairvalue:
Level1—Valuationsarebasedonquotedpricesforidenticalassetsandliabilitiesinactivemarkets.
Level2—ValuationsarebasedonobservableinputsotherthanquotedpricesincludedinLevel1,suchasquotedpricesforsimilarassetsand
liabilitiesinactivemarkets,quotedpricesforidenticalorsimilarassetsandliabilitiesinmarketsthatarenotactive,orotherinputsthatareobservableor
canbecorroboratedbyobservablemarketdata.
Level3—Valuationsarebasedonunobservableinputsreflectingourownassumptions,consistentwithreasonablyavailableassumptionsmadeby
othermarketparticipants.Thesevaluationsrequiresignificantjudgment.
Derivative Financial Instruments
Ourgoalinmanagingourforeignexchangeriskistoreduce,totheextentpracticable,ourpotentialexposuretothechangesthatexchangeratesmighthave
onourearnings,cashflowsandfinancialposition.Wedonotusederivativesfortradingorspeculativepurposes.Weaccountforourderivativeinstrumentsas
eitherassetsorliabilitiesandcarrythematfairvalue.
Incertaincircumstances,weenterintoforeigncurrencyforwardexchangecontracts(“forwardcontracts”)toreducetheeffectsoffluctuatingforeign
currencyexchangeratesonourcashflowsdenominatedinforeigncurrencies.Ourderivativeinstrumentsorforwardcontractsenteredintowhicharenot
designatedashedgesasofDecember31,2015aredisclosedbelowin“Note5—Financial Instruments ”inthenotestotheconsolidatedfinancialstatements.
Derivativesthatdonotqualifyforhedgeaccountingmustbeadjustedtofairvaluethroughcurrentincome.Monetaryassetsandliabilitiesdenominatedina
currencyotherthanthefunctionalcurrencyofagivensubsidiaryareremeasuredatspotratesineffectonthebalancesheetdatewiththeeffectsofchangesinspot
ratesreportedinother,netonourconsolidatedstatementsofoperations.Accordingly,fairvaluechangesintheforwardcontractshelpmitigatethechangesinthe
valueoftheremeasuredassetsandliabilitiesattributabletochangesinforeigncurrencyexchangerates,
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