Tucows 2015 Annual Report Download - page 183

Intangible Assets subject to amortization
Intangible assets subject to amortization, consist of technology, brand and customer relationships and are
amortized on a straight line basis over their estimated useful lives as follows:
(in years)
Technology 2-7
Brand 7
Customer relationships 4-7
Network rights 15
The Company continually evaluates whether events or circumstances have occurred that indicate the remaining
estimated useful lives of its intangible assets subject to amortization may warrant revision or that the remaining balance of
such assets may not be recoverable. The Company uses an estimate of the related undiscounted cash flows over the
remaining life of the asset in measuring whether the asset is recoverable.
(h) Revenue recognition
The Company’s revenues are derived from domain name registration fees on both a wholesale and retail basis, the
sale of domain names, the provisioning of other Internet services and advertising and other revenue. Amounts received in
advance of meeting the revenue recognition criteria described below are recorded as deferred revenue.
The Company earns registration fees in connection with each new, renewed and transferred-in registration and
from providing provisioning of other Internet services to resellers and registrars on a monthly basis. Service has been
provided in connection with registration fees once the Company has confirmed that the requested domain name has been
appropriately recorded in the registry under contractual performance standards.
Domain names are generally purchased for terms of one to ten years. Registration fees charged for domain name
registration and provisioning services are recognized on a straight-line basis over the life of the contracted term. Other
Internet services that are provisioned for annual periods or longer, are recognized on a straight-line basis over the life of
the contracted term. Other Internet services that are provisioned on a monthly basis are recognized as services are
provided.
For arrangements with multiple deliverables, the Company allocates revenue to each deliverable if the delivered
item(s) has value to the customer on a standalone basis and, if the arrangement includes a general right of return relative to
the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the
control of the Company. The fair value of the selling price for a deliverable is determined using a hierarchy of (1)
Company specific objective and reliable evidence, then (2) third-party evidence, then (3) best estimate of selling price. The
Company allocates any arrangement fee to each of the elements based on their relative selling prices.
Revenue generated from the sale of domain names, earned from transferring the rights to domain names under the
Company’s control, are recognized once the rights have been transferred and payment has been received in full.
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