Clearwire 2009 Annual Report Download - page 95

We max
i
m
i
ze t
h
e use o
f
o
b
serva
bl
e
i
nputs an
d
m
i
n
i
m
i
ze t
h
e use o
f
uno
b
serva
bl
e
i
nputs w
h
en
d
eve
l
op
i
ng
f
a
ir
va
l
ue measurements. I
fli
ste
d
pr
i
ces or quotes are not ava
il
a
bl
e,
f
a
i
rva
l
ue
i
s
b
ase
d
upon
i
nterna
ll
y
d
eve
l
ope
d
m
odels that primaril
y
use, as inputs, market-based or independentl
y
sourced market parameters, includin
g
but not
li
m
i
te
d
to
i
nterest rate y
i
e
ld
curves, vo
l
at
ili
t
i
es, equ
i
ty or
d
e
b
tpr
i
ces, an
d
cre
di
t curves. We ut
ili
ze certa
i
n
assumpt
i
ons t
h
at mar
k
et part
i
c
i
pants wou
ld
use
i
npr
i
c
i
ng t
h
e
fi
nanc
i
a
li
nstrument,
i
nc
l
u
di
ng assumpt
i
ons a
b
out
r
isk, such as credit, inherent and default risk. The de
g
ree of mana
g
ement
j
ud
g
ment involved in determinin
g
the fai
r
value of a financial instrument is dependent upon the availability of quoted market prices or observable marke
t
p
arameters. For
fi
nanc
i
a
li
nstruments t
h
at tra
d
e act
i
ve
ly
an
dh
ave quote
d
mar
k
et pr
i
ces or o
b
serva
bl
e mar
k
et
p
arameters, t
h
ere
i
sm
i
n
i
ma
lj
u
dg
ment
i
nvo
l
ve
di
n measur
i
n
gf
a
i
rva
l
ue. W
h
en o
b
serva
bl
e mar
k
et pr
i
ces an
d
p
arameters are not fully available, management judgment is necessary to estimate fair value. In addition, changes in
m
ar
k
et con
di
t
i
ons ma
y
re
d
uce t
h
eava
il
a
bili
t
y
an
d
re
li
a
bili
t
y
o
f
quote
d
pr
i
ces or o
b
serva
bl
e
d
ata. In t
h
ese
i
nstances
,
w
e use certa
i
n uno
b
serva
bl
e
i
nputs t
h
at cannot
b
eva
lid
ate
dby
re
f
erence to a rea
dily
o
b
serva
bl
e mar
k
et or exc
h
an
ge
data and rel
y
, to a certain extent, on our own assumptions about the assumptions that a market participant would us
e
i
npr
i
c
i
ng t
h
e secur
i
ty. T
h
ese
i
nterna
ll
y
d
er
i
ve
d
va
l
ues are compare
d
w
i
t
h
non-
bi
n
di
ng va
l
ues rece
i
ve
df
rom
b
ro
k
ers
or ot
h
er
i
n
d
epen
d
ent sources, as ava
il
a
bl
e. See Note 12, Fa
i
rVa
l
ue,
f
or
f
urt
h
er
i
n
f
ormat
i
on.
Accounts Receivabl
e
—
Accounts receivables are stated at amounts due from customers net of an allowance
for doubtful accounts
.
I
nventor
y
— Inventory primarily consists of customer premise equipment, which we refer to as CPE, and othe
r
accessories sold to customers and is stated at the lower of cost or net realizable value. Cost is determined under the
avera
g
e cost met
h
o
d
. We recor
di
nventor
y
wr
i
te-
d
owns
f
or o
b
so
l
ete an
d
s
l
ow-mov
i
n
gi
tems
b
ase
d
on
i
nventor
y
turnover trends and historical ex
p
erience
.
P
roperty, Plant and E
q
uipmen
t
— Propert
y
, plant and equipment, which we refer to as PP&E, is stated at cost,
n
et o
f
accumu
l
ate
dd
eprec
i
at
i
on. Deprec
i
at
i
on
i
sca
l
cu
l
ate
d
on a stra
i
g
h
t-
li
ne
b
as
i
sovert
h
e est
i
mate
d
use
f
u
lli
ves o
f
t
h
e assets once t
h
e assets are p
l
ace
di
n serv
i
ce. Our networ
k
construct
i
on expen
di
tures are recor
d
e
d
as construct
i
o
n
i
n pro
g
ress until the network or other asset is placed in service, at which time the asset is transferred to the
appropriate PP&E category. We capitalize costs of additions and improvements, including direct costs of con-
s
truct
i
ng PP&E an
di
nterest costs re
l
ate
d
to construct
i
on. T
h
e est
i
mate
d
use
f
u
l lif
eo
f
equ
i
pment
i
s
d
eterm
i
ne
d
b
ase
d
on
hi
stor
i
ca
l
usa
g
eo
fid
ent
i
ca
l
or s
i
m
il
ar equ
i
pment, w
i
t
h
cons
id
erat
i
on
gi
ven to tec
h
no
l
o
gi
ca
l
c
h
an
g
es an
d
i
ndustry trends that could impact the network architecture and asset utilization. Leasehold improvements are
r
ecorded at cost and amortized over the lesser of their estimated useful lives or the related lease term, including
r
enewa
l
st
h
at are reasona
bly
assure
d
.Ma
i
ntenance an
d
repa
i
rs are expense
d
as
i
ncurre
d
.
PP&E
i
s assesse
df
or
i
mpa
i
rment w
h
enever events or c
h
an
g
es
i
nc
i
rcumstances
i
n
di
cate t
h
at t
h
e carr
yi
n
g
amount of an asset ma
y
not be recoverable. When such events or circumstances exist, we would determine the
r
ecovera
bili
ty o
f
t
h
e asset’s carry
i
ng va
l
ue
b
y est
i
mat
i
ng t
h
e expecte
d
un
di
scounte
df
uture cas
hfl
ows t
h
at are
di
rect
l
y assoc
i
ate
d
w
i
t
h
an
d
t
h
at are expecte
d
to ar
i
se as a
di
rect resu
l
to
f
t
h
e use o
f
t
h
e asset. I
f
t
h
e expecte
d
undiscounted future cash flows are less than the carr
y
in
g
amount of the asset, a loss is reco
g
nized for the difference
.
For purposes o
f
recogn
i
t
i
on an
d
measurement, we group our
l
ong-
li
ve
d
assets,
i
nc
l
u
di
ng PP&E an
di
ntang
ible
assets w
i
t
hd
e
fi
n
i
te use
f
u
lli
ves, at t
h
e
l
owest
l
eve
lf
or w
hi
c
h
t
h
ere are
id
ent
ifi
a
bl
e cas
hfl
ows w
hi
c
h
are
l
arge
l
y
i
ndependent of other assets and liabilities, and we test for impairment on an a
gg
re
g
ated basis for assets in the United
S
tates consistent with the management of the business on a national scope. There were no PP&E impairment losse
s
r
ecor
d
e
di
nt
h
e years en
d
e
d
Decem
b
er 31, 2009, 2008 an
d
2007.
I
na
ddi
t
i
on to t
h
e ana
l
yses
d
escr
ib
e
d
a
b
ove, we per
i
o
di
ca
ll
y assess certa
i
n assets t
h
at
h
ave not yet
b
ee
n
d
ep
l
o
y
e
di
n our networ
k
,
i
nc
l
u
di
n
g
equ
i
pment an
d
ce
ll
s
i
te
d
eve
l
opment costs. T
hi
s assessment
i
nc
l
u
d
es t
h
ewr
i
te-
off of network equipment for estimated shrinka
g
e experienced durin
g
the deplo
y
ment process and the write-off o
f
n
etwor
k
equ
i
pment an
d
ce
ll
s
i
te
d
eve
l
opment costs w
h
enever events or c
h
anges
i
nc
i
rcumstances cause us t
o
c
onc
l
u
d
et
h
at suc
h
assets are no
l
onger nee
d
e
d
to meet management’s strateg
i
c networ
k
p
l
ans an
d
w
ill
not
be
deplo
y
ed.
85
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)