Virgin Media 2010 Annual Report Download - page 111

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 3—Recent Accounting Pronouncements
In 2009, the FASB amended the accounting standards for revenue recognition to:
• provide updated guidance on whether multiple deliverables exist, how the deliverables in an
arrangement should be separated, and how the consideration should be allocated;
• require an entity to allocate revenue in an arrangement using estimated selling prices (ESP) of
deliverables if a vendor does not have vendor-specific objective evidence of selling price (VSOE) or
third-party evidence of selling price (TPE); and
• eliminate the use of the residual method and require an entity to allocate revenue using the relative
selling price method.
We adopted this guidance as of January 1, 2011 on a prospective basis applicable for transactions
originating or materially modified after that date. Revenue is allocated to each unit of accounting based on a
selling price hierarchy. The selling price for a deliverable is based on its vendor-specific objective evidence
(VSOE) if available, third party evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if
neither VSOE nor TPE is available. We then recognize revenue on each deliverable in accordance with our
policies for product and service revenue recognition. The adoption of this guidance is not expected to have a
material impact on our consolidated financial statements.
In January 2010, the FASB issued new guidance for fair value measurements and disclosures. The guidance
improves disclosures about fair value measurements by requiring a greater level of disaggregated information
and more robust disclosures about valuation techniques and inputs to fair value measurements. In addition, the
guidance requires separate disclosure of amounts of significant transfers in and out of Levels 1 and 2 of the fair
value hierarchy and a reconciliation of fair value measurements using significant unobservable inputs (Level 3 of
the fair value hierarchy). We have adopted the disclosure requirements of this standard which did not have a
material impact on our consolidated financial statements.
In February 2010, the FASB issued new guidance for the disclosure of subsequent events. As a result of this
guidance, we are no longer required to disclose the date through which we have evaluated subsequent events in
the financial statements. We have adopted the disclosure requirements of this standard which did not have a
material impact on our consolidated financial statements.
Note 4—Disposals
Disposal of Virgin Media TV
On June 4, 2010, we announced the sale to BSkyB of our television channel business known as Virgin
Media TV. Virgin Media TV’s operations comprised our former Content segment. We determined that as of
June 30, 2010 the planned sale met the requirements for Virgin Media TV to be reflected as assets and liabilities
held for sale and discontinued operations in both the current and prior years and, accordingly, we adjusted the
consolidated balance sheet as of December 31, 2009 and consolidated statements of operations and cash flows for
the years ended December 31, 2009 and 2008.
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