Clearwire 2008 Annual Report Download - page 94

Restricte
d
Cas
h
—
Restr
i
cte
d
cas
hi
sc
l
ass
ifi
e
d
as a current or noncurrent asset
b
ase
d
on
i
ts
d
es
i
gnate
d
p
urpose. T
h
ema
j
or
i
ty o
f
t
hi
s restr
i
cte
d
cas
h
re
l
ates to outstan
di
ng
l
etters o
f
cre
di
t.
I
nvestments — Statement of Financial Accountin
g
Standards, which we refer to as SFAS, No. 115
,
A
ccounting
f
or Certain Investments in Debt and E
q
uity Securitie
s
,
and Staff Accountin
g
Bulletin, which we refer to as
S
AB Topic 5.M, Ot
h
er T
h
an Temporary Impairment of Certain Investments in De
b
tan
d
Equity Securitie
s
,
prov
ide
gu
id
ance on account
i
ng
f
or
i
nvestments an
dd
eterm
i
n
i
ng w
h
en an
i
nvestment
i
sot
h
er-t
h
an-temporar
il
y
i
mpa
i
re
d
.
W
e classif
y
marketable debt and equit
y
securities that are available for current operations as short-term available-
f
or-sa
l
e
i
nvestments, an
d
t
h
ese secur
i
t
i
es are state
d
at
f
a
i
rva
l
ue. Unrea
li
ze
d
ga
i
ns an
dl
osses are recor
d
e
d
w
i
t
hi
n
accumu
l
ate
d
ot
h
er compre
h
ens
i
ve
i
ncome (
l
oss). Losses are recogn
i
ze
di
n net
l
oss w
h
en a
d
ec
li
ne
i
n
f
a
i
rva
l
ue
is
determined to be other-than-temporar
y
. Realized
g
ains and losses are determined on the basis of the specifi
c
i
dentification method. We review our short-term and long-term investments on an ongoing basis for indicators o
f
ot
h
er-t
h
an-temporary
i
mpa
i
rment, an
d
t
hi
s
d
eterm
i
nat
i
on requ
i
res s
i
gn
ifi
cant
j
u
d
gment
.
We
h
ave an
i
nvestment port
f
o
li
o compr
i
se
d
o
f
U.S. Treasur
i
es an
d
auct
i
on rate secur
i
t
i
es. T
h
eva
l
ue o
f
t
h
ese
s
ecur
i
t
i
es
i
ssu
bj
ect to mar
k
et vo
l
at
ili
t
yd
ur
i
n
g
t
h
e per
i
o
d
t
h
e
i
nvestments are
h
e
ld
an
d
unt
il
t
h
e
i
rsa
l
e or matur
i
t
y.
W
e recognize realized losses when declines in the fair value of our investments below their cost basis are judged to
be other-than-temporary. In determining whether a decline in fair value is other-than-temporary, we consider
var
i
ous
f
actors
i
nc
l
u
di
n
g
mar
k
et pr
i
ce (w
h
en ava
il
a
bl
e),
i
nvestment rat
i
n
g
s, t
h
e
fi
nanc
i
a
l
con
di
t
i
on an
d
near-ter
m
p
rospects of the issuer, the len
g
th of time and the extent to which the fair value has been less than the cost basis, an
d
our intent and ability to hold the investment until maturity or for a period of time sufficient to allow for any
ant
i
c
i
pate
d
recover
yi
n mar
k
et va
l
ue. We ma
k
es
ig
n
ifi
cant
j
u
dg
ments
i
n cons
id
er
i
n
g
t
h
ese
f
actors. I
fi
t
i
s
j
u
dg
e
d
t
h
at
a decline in fair value is other-than-temporar
y
, the investment is valued at the current estimated fair value and
a
r
ealized loss e
q
ual to the decline is reflected in the consolidated statement of o
p
erations.
I
n determinin
g
fair value, we use quoted prices in active markets where such prices are available, or models to
e
st
i
mate t
h
e
f
a
i
rva
l
ue us
i
ng var
i
ous met
h
o
d
s
i
nc
l
u
di
ng t
h
e mar
k
et an
di
ncome approac
h
es. For
i
nvestments w
h
er
e
m
odels are used to estimate fair value in the absence of
q
uoted market
p
rices, we utilize certain assum
p
tions tha
t
m
arket participants would use in pricin
g
the investment, includin
g
assumptions about risk and the risks inherent in
t
h
e
i
nputs to t
h
eva
l
uat
i
on tec
h
n
i
que. T
h
ese
i
nputs
i
nc
l
u
d
et
h
ose t
h
at are rea
dil
yo
b
serva
bl
e, mar
k
et corro
b
orate
d,
and unobservable Compan
y
inputs. We believe that our pricin
g
models, inputs and assumptions are what marke
t
p
articipants would use in pricin
g
the securities. We maximize the use of observable inputs in the pricin
g
model
s
w
h
ere quote
d
mar
k
et pr
i
ces
f
rom secur
i
t
i
es an
dd
er
i
vat
i
ves exc
h
anges are ava
il
a
bl
ean
d
re
li
a
bl
e. We typ
i
ca
ll
y
r
ece
i
ve externa
l
va
l
uat
i
on
i
n
f
ormat
i
on
f
or U.S. Treasur
i
es, ot
h
er U.S. Government an
d
A
g
enc
y
secur
i
t
i
es, as we
ll
a
s
c
ertain corporate debt securities, mone
y
market funds and certificates of deposit. We also use certain unobservable
i
nputs that cannot be validated by reference to a readily observable market or exchange data and rely, to a certain
e
xtent, on mana
g
ement’s own assumpt
i
ons a
b
out t
h
e assumpt
i
ons t
h
at mar
k
et part
i
c
i
pants wou
ld
use
i
npr
i
c
i
n
g
t
he
s
ecur
i
t
y
. Our
i
nterna
lly g
enerate
d
pr
i
c
i
n
g
mo
d
e
l
sma
yi
nc
l
u
d
e our own
d
ata an
d
requ
i
re us to use our
j
u
dg
ment
in
i
nterpreting relevant market data, matters of uncertainty and matters that are inherently subjective in nature. We use
m
any
f
actors t
h
at are necessary to est
i
mate mar
k
et va
l
ues,
i
nc
l
u
di
ng,
i
nterest rates, mar
k
et r
i
s
k
s, mar
k
et sprea
d
s,
t
i
m
i
n
g
o
f
cas
hfl
ows, mar
k
et
li
qu
idi
t
y
,rev
i
ew o
f
un
d
er
lyi
n
g
co
ll
atera
l
an
d
pr
i
nc
i
pa
l
,
i
nterest an
ddi
v
id
en
d
p
a
y
ments. The use of different
j
ud
g
ments and assumptions could result in different presentations of pricin
g
an
d
secur
i
ty pr
i
ces cou
ld
c
h
ange s
i
gn
ifi
cant
l
y
b
ase
d
on mar
k
et con
di
t
i
ons
.
F
air Va
l
ue Measurement
s
—
On January 1, 2008, we adopted SFAS No. 157, Fair Va
l
ue Measurement
s
,
w
hi
c
h
we refer to as SFAS No. 157, for our financial assets and liabilities that are reco
g
nized or disclosed at fair value on
an annual or more frequentl
y
recurrin
g
basis. These include our derivative financial instruments and our short-term
and long-term investments. The adoption of SFAS No. 157 did not have a significant effect on our consolidated
fi
nanc
i
a
l
statements. In accor
d
ance w
i
t
h
F
i
nanc
i
a
l
Account
i
ng Stan
d
ar
d
s Boar
d
,w
hi
c
h
we re
f
er to as FASB, Sta
ff
P
osition No. FAS 1
5
7-2
,
Eff
ective Date o
f
FASB Statement No. 15
7
, which we refer to as FSP No. 1
5
7-2, we hav
e
82
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)