Twenty-First Century Fox 2013 Annual Report Download - page 97

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
investments by reference to their publicly traded stock price. With respect to private company investments, the
Company makes its estimate of fair value by considering other available information, including recent investee
equity transactions, discounted cash flow analyses, estimates based on comparable public company operating
multiples and, in certain situations, balance sheet liquidation values. If the fair value of the investment has
dropped below the carrying amount, management considers several factors when determining whether an other-
than-temporary decline in market value has occurred, including the length of the time and extent to which the
market value has been below cost, the financial condition and near-term prospects of the issuer, the intent and
ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any
anticipated recovery in market value and other factors influencing the fair market value, such as general market
conditions.
The Company regularly reviews available-for-sale investment securities for other-than-temporary
impairment based on criteria that include the extent to which the investment's carrying value exceeds its related
market value, the duration of the market decline, the Company’s ability to hold until recovery and the financial
strength and specific prospects of the issuer of the security.
The Company regularly reviews investments accounted for at cost for other-than-temporary impairment
based on criteria that include the extent to which the investment's carrying value exceeds its related estimated fair
value, the duration of the estimated fair value decline, the Company’s ability to hold until recovery and the
financial strength and specific prospects of the issuer of the security.
Long-lived assets
ASC 360, “Property, Plant, and Equipment,” (“ASC 360”) and ASC 350 require that the Company
periodically review the carrying amounts of its long-lived assets, including property, plant and equipment and
finite-lived intangible assets, to determine whether current events or circumstances indicate that such carrying
amounts may not be recoverable. If the carrying amount of the asset is greater than the expected undiscounted
cash flows to be generated by such asset, an impairment adjustment is recognized if the carrying value of such
asset exceeds its fair value. The Company generally measures fair value by considering sale prices for similar
assets or by discounting estimated future cash flows using an appropriate discount rate. Considerable
management judgment is necessary to estimate the fair value of assets, accordingly, actual results could vary
significantly from such estimates. Assets to be disposed of are carried at the lower of their financial statement
carrying amount or fair value less their costs to sell.
Guarantees
The Company follows ASC 460, “Guarantees” (“ASC 460”). ASC 460 requires a guarantor to recognize, at
the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing certain
guarantees. Subsequently, the initial liability recognized for the guarantee is generally reduced as the Company is
released from the risk under the guarantee. The Company periodically reviews the facts and circumstances
pertaining to its guarantees in determining the level of related risk.
Revenue recognition
Revenue is recognized when persuasive evidence of an arrangement exists, the fees are fixed or
determinable, the product or service has been delivered and collectability is reasonably assured. The Company
considers the terms of each arrangement to determine the appropriate accounting treatment.
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