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arrangements, the Company generally recognizes as revenue in the period the agreement is executed the portion of the payment attributable to
past use of the patented technology and amortize the remaining portion of such payments on a straight line basis over the life of the licensed
patent(s). With regard to royalty-
bearing license arrangements, the Company recognizes revenue of license fees earned during the applicable
period.
(e) Fair Value Measurements
j2 Global complies with the provisions of FASB ASC Topic No. 820, Fair Value Measurements and Disclosures (“ASC 820”),
in
measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the
disclosures required for fair value measurements of financial assets and liabilities and non-financial assets and liabilities.
As of December 31, 2010 and 2009, the carrying value of cash and cash equivalents, short-
term investments, accounts receivable,
interest receivable, accounts payable, accrued expenses, interest payable and customer deposits approximates fair value due to the short-
term
nature of such items. The carrying value of other long-
term liabilities approximates fair value as the related interest rates approximate rates
currently available to j2 Global.
(f) Cash and Cash Equivalents
j2 Global considers cash equivalents to be only those investments that are highly liquid, readily convertible to cash and with maturities
of 90 days or less at the purchase date.
(g) Investments
j2 Global accounts for its investments in debt securities in accordance with FASB ASC Topic No. 320, Investments –
Debt and Equity
Securities (“ASC 320”).
These investments are typically comprised of readily marketable corporate debt securities and auction rate securities. j2
Global determines the appropriate classification of its investments at the time of acquisition and evaluates such determination at each balance
sheet date. Held-to-
maturity securities are those investments which the Company has the ability and intent to hold until maturity and are
recorded at amortized cost. Available-for-
sale securities are those investments j2 Global does not intend to hold to maturity and can be sold.
Available-for-
sale securities are carried at fair value with unrealized gains and losses included in other comprehensive income. Trading securities
are carried at fair value, with unrealized gains and losses included in investment income. All securities are accounted for on a specific
identification basis.
(h) Concentration of Credit Risk
All of the Company’
s cash, cash equivalents and marketable securities are invested at major financial institutions primarily within the
United States, United Kingdom and Ireland. These institutions are required to invest the Company’s cash in accordance with the Company’
s
investment policy with the principal objectives being preservation of capital, fulfillment of liquidity needs and above market returns
commensurate with preservation of capital. The Company’
s investment policy also requires that investments in marketable securities be in only
highly rated instruments, with limitations on investing in securities of any single issuer. However, these investments are not insured against the
possibility of a complete loss of earnings or principal and are inherently subject to the credit risk related to the continued credit worthiness of the
underlying issuer and general credit market risks. At December 31, 2010 and December 31, 2009, the Company’
s cash and cash equivalents,
were maintained in accounts that are insured up to the limit determined by the appropriate governmental agency.
The amounts held by Irish
banks were fully insured through December 31, 2010, however, the insured amount held in other institutions is immaterial in comparison to the
total amount of the Company’s cash and cash equivalents held by these institutions which is not insured.
(i) Foreign Currency
Some of j2 Global’
s foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and
liabilities are translated at exchange rates prevailing at the balance sheet dates. Revenues, costs and expenses are translated into U.S. Dollars at
average exchange rates for the period. Gains and losses resulting from translation are recorded as a component of accumulated other
comprehensive income/(loss). Realized gains and losses from foreign currency transactions are recognized as interest and other income/expense.
(j) Property and Equipment
Property and equipment are stated at cost. Equipment under capital leases is stated at the present value of the minimum lease payments.
Depreciation is calculated using the straight-
line method over the estimated useful lives of the assets. The estimated useful lives of property and
equipment range from one to 10 years. Fixtures, which are comprised primarily of leasehold improvements and equipment under capital leases,
are amortized on a straight-
line basis over their estimated useful lives or for leasehold improvements, the related lease term, if less. The
Company has capitalized certain internal use software and Website development costs which are included in property and equipment. The
estimated useful life of costs capitalized is evaluated for each specific project and ranges
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