TripAdvisor 2015 Annual Report Download - page 76

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Contingent Liabilities
Periodically,wereviewthestatusofallsignificantoutstandingmatterstoassessanypotentialfinancialexposure.When(i)itisprobablethatanassethas
beenimpairedoraliabilityhasbeenincurredand(ii)theamountofthelosscanbereasonablyestimated,werecordtheestimatedlossinourconsolidated
statementsofoperations.Weprovidedisclosureinthenotestotheconsolidatedfinancialstatementsforlosscontingenciesthatdonotmeetboththeseconditionsif
thereisareasonablepossibilitythatalossmayhavebeenincurredthatwouldbematerialtothefinancialstatements.Significantjudgmentmayberequiredto
determinetheprobabilitythataliabilityhasbeenincurredandwhethersuchliabilityisreasonablyestimable.Webaseaccrualsmadeonthebestinformation
availableatthetimewhichcanbehighlysubjective.Thefinaloutcomeofthesematterscouldvarysignificantlyfromtheamountsincludedintheaccompanying
consolidatedfinancialstatements.
Comprehensive Income (Loss)
Comprehensiveincome(loss)currentlyconsistsofnetincome,cumulativeforeigncurrencytranslationadjustments,andunrealizedgainsandlosseson
available-for-salesecurities,netoftax.
Earnings Per Share (“EPS”)
Basic Earnings Per Share
Wecomputebasicearningspershare(“BasicEPS”)bydividingnetincomebytheweightedaveragenumberofcommonsharesoutstandingduringthe
period.WecomputetheweightedaveragenumberofcommonsharesoutstandingduringthereportingperiodusingthetotalofcommonstockandClassBcommon
stockoutstandingasofthelastdayofthepreviousyearendreportingperiodplustheweightedaverageofanyadditionalsharesissuedandoutstandinglessthe
weightedaverageofanytreasurysharesrepurchasedduringthereportingperiod.
Diluted Earnings Per Share
Wecomputedilutedearningspershare(“DilutedEPS”)bydividingnetincomebythesumoftheweightedaveragenumberofcommonandcommon
equivalentsharesoutstandingduringtheperiod.Wecomputedtheweightedaveragenumberofcommonandcommonequivalentsharesoutstandingduringthe
periodusingthesumof(i)thenumberofsharesofcommonstockandClassBcommonstockusedinthebasicearningspersharecalculationasindicatedabove,
and(ii)ifdilutive,theincrementalweightedaveragecommonstockthatwewouldissueupontheassumedexerciseofoutstandingcommonequivalentshares
relatedtostockoptionsandthevestingofrestrictedstockunitsusingthetreasurystockmethod,and(iii)ifdilutive,performancebasedawardsbasedonthe
numberofsharesthatwouldbeissuableasoftheendofthereportingperiodassumingtheendofthereportingperiodwasalsotheendofthecontingencyperiod.
Underthetreasurystockmethod,theassumedproceedscalculationincludestheactualproceedstobereceivedfromtheemployeeuponexercise,the
averageunrecognizedcompensationcostduringtheperiodandanytaxbenefitscrediteduponexercisetoadditionalpaid-in-capital.Thetreasurystockmethod
assumesthatacompanyusestheproceedsfromtheexerciseofanawardtorepurchasecommonstockattheaveragemarketpricefortheperiod.Windfalltax
benefitscreatedupontheexerciseofanawardwouldbeaddedtoassumedproceeds,whileshortfallschargedtoadditionalpaid-in-capitalwouldbedeductedfrom
assumedproceeds.Anyshortfallsnotcoveredbythewindfalltaxpoolwouldbechargedtotheincomestatementandwouldbeexcludedfromthecalculationof
assumedproceeds,ifany.
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