Virgin Media 2009 Annual Report Download - page 112

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VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 2—Significant Accounting Policies (Continued)
Software Development Costs
We capitalize costs related to computer software developed or obtained for internal use in
accordance with the Intangibles—Goodwill and Other Topic of the FASB ASC. Software obtained for
internal use has generally been enterprise-level business and finance software that we customize to
meet our specific operational needs. Costs incurred in the application development phase are
capitalized and amortized over their useful lives, which are generally three to five years. We have not
sold, leased or licensed software developed for internal use to our customers and we have no intention
of doing so in the future.
Income Taxes
We provide for income taxes in accordance with the Income Taxes Topic of the FASB ASC.
Judgment is required in determining our provision for income taxes, deferred tax assets and liabilities
and the extent to which deferred tax assets can be recognized. We recognize deferred tax assets only if
it is more likely than not that sufficient taxable income will be available in the future against which the
temporary differences and unused tax losses can be utilized. We have considered future taxable income
and tax planning strategies in assessing whether deferred tax assets should be recognized.
Loss from Continuing and Discontinued Operations Per Share and Net Loss Per Share
Basic and diluted loss from continuing operations and discontinued operations per share and net
loss per share are computed by dividing the loss from continuing operations, discontinued operations
and net loss, respectively, by the average number of shares outstanding during the years ended
December 31, 2009, 2008 and 2007. Options, warrants, shares issuable under the convertible senior
notes and shares of restricted stock held in escrow are excluded from the calculation of diluted net loss
from continuing operations and discontinued operations per share for all periods presented since the
inclusion of such securities is anti-dilutive. The average number of shares outstanding is computed as
follows (in millions):
Year ended December 31,
2009 2008 2007
Adjusted number of shares outstanding at start of period .... 328.1 327.5 323.9
Issues of common stock (average number outstanding during
the period) ................................... 0.7 0.5 2.0
Average number of shares outstanding ................. 328.8 328.0 325.9
Note 3—Recent Accounting Pronouncements
In June 2009, the FASB issued guidance relating to the FASB Accounting Standards Codification.
Effective for interim or annual financial periods ending after September 15, 2009, the ASC became the
single official source of authoritative U.S. GAAP (other than guidance issued by the SEC), superseding
existing FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force (EITF),
and related literature. After September 15, 2009, only one level of authoritative U.S. GAAP exists. All
other literature will be considered non-authoritative. The ASC does not change U.S. GAAP; instead, it
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