Clearwire 2009 Annual Report Download - page 98

vest
i
ng sc
h
e
d
u
l
e on a stra
i
g
h
t-
li
ne
b
as
i
s over t
h
e requ
i
s
i
te serv
i
ce per
i
o
df
or eac
h
separate
l
y vest
i
ng port
i
on o
f
t
he
awar
d
as
if
t
h
e awar
d
was,
i
nsu
b
stance, mu
l
t
i
p
l
e awar
d
s.
Operatin
g
Lease
s
—
We
h
ave operat
i
ng
l
eases
f
or spectrum
li
censes, towers an
d
certa
i
n
f
ac
ili
t
i
es, an
d
e
qu
i
pment
f
or use
i
n our operat
i
ons. Certa
i
no
f
our spectrum
li
censes are
l
ease
df
rom t
hi
r
d
-part
yh
o
ld
ers o
f
Educational Broadband Service, which we refer to as EBS, spectrum licenses granted by the FCC. EBS licenses
authorize the provision of certain communications services on the EBS channels in certain markets throughout th
e
U
n
i
te
d
States. We account
f
or t
h
ese spectrum
l
eases as executor
y
contracts w
hi
c
h
are s
i
m
il
ar to operat
i
n
gl
eases
.
S
i
g
ned leases which have unmet conditions required to become effective are not amortized until such conditions are
m
et and are included in spectrum licenses in the accompanying consolidated balance sheets, if such leases requir
e
up
f
ront payments. For
l
eases conta
i
n
i
ng sc
h
e
d
u
l
e
d
rent esca
l
at
i
on c
l
auses, we recor
d
m
i
n
i
mum renta
l
payments on
a strai
g
ht-line basis over the term of the lease, includin
g
the expected renewal periods as appropriate. For leases
c
ontainin
g
tenant improvement allowances and rent incentives, we record deferred rent, which is a liabilit
y
, and tha
t
d
e
f
erre
d
rent
i
s amort
i
ze
d
over t
h
e term o
f
t
h
e
l
ease,
i
nc
l
u
di
ng t
h
e expecte
d
renewa
l
per
i
o
d
s as appropr
i
ate, as a
r
eduction to rent ex
p
ense.
F
oreign
C
urrenc
y
— Our
i
nternat
i
ona
l
su
b
s
idi
ar
i
es
g
enera
lly
use t
h
e
i
r
l
oca
l
currenc
y
as t
h
e
i
r
f
unct
i
ona
l
c
urrenc
y
. Assets an
dli
a
bili
t
i
es are trans
l
ate
d
at exc
h
an
g
e rates
i
ne
ff
ect at t
h
e
b
a
l
ance s
h
eet
d
ate. Resu
l
t
i
n
g
translation adjustments are recorded within accumulated other comprehensive income (loss). Income and expense
accounts are trans
l
ate
d
at t
h
e avera
g
e mont
hly
exc
h
an
g
e rates. T
h
ee
ff
ects o
f
c
h
an
g
es
i
nexc
h
an
g
e rates
b
etween t
h
e
d
es
ig
nate
df
unct
i
ona
l
currenc
y
an
d
t
h
e currenc
yi
nw
hi
c
h
a transact
i
on
i
s
d
enom
i
nate
d
are recor
d
e
d
as
f
ore
ig
n
c
urrenc
y
transaction
g
ains (losses) and recorded in the consolidated statement of operations.
C
oncentration o
f
Ris
k
— We believe that the
g
eo
g
raphic diversit
y
of our customer base and retail nature of our
product minimizes the risk of incurring material losses due to concentrations of credit risk
.
R
ecent Account
i
n
g
Pronouncement
s
In June and December 2009, the Financial Accountin
g
Standards Board, which we refer to as the FASB, issue
d
n
ew account
i
ng gu
id
ance t
h
at amen
d
st
h
e conso
lid
at
i
on gu
id
ance app
li
ca
bl
etovar
i
a
bl
e
i
nterest ent
i
t
i
es. T
he
amendments will affect the overall consolidation anal
y
sis under the current accountin
gg
uidance. The ne
w
accountin
gg
uidance is effective for fiscal
y
ears and interim periods be
g
innin
g
after November 1
5
, 2009. We
are current
l
yeva
l
uat
i
ng t
h
e
i
mpact o
f
t
h
enewgu
id
ance on our
fi
nanc
i
a
l
con
di
t
i
on an
d
resu
l
ts o
f
operat
i
ons.
In August 2009, the FASB issued new accounting guidance for the fair value measurement of liabilities when a
q
uote
d
pr
i
ce
i
n an act
i
ve mar
k
et
i
s not ava
il
a
bl
e. We a
d
opte
d
t
h
e new account
i
n
gg
u
id
ance on Octo
b
er 1, 2009. T
he
a
d
opt
i
on
did
not
h
ave an
yi
mpact on our
fi
nanc
i
a
l
con
di
t
i
on or resu
l
ts o
f
operat
i
ons
.
In Octo
b
er 2009, t
h
e FASB
i
ssue
d
new account
i
ng gu
id
ance t
h
at amen
d
st
h
e revenue recogn
i
t
i
on
f
or mu
l
t
i
p
l
e-
e
lement arran
g
ements and expands the disclosure requirements related to such arran
g
ements. The new
g
uidance
amends the criteria for separatin
g
consideration in multiple-deliverable arran
g
ements, establishes a sellin
g
price
hi
erarc
h
y
f
or
d
eterm
i
n
i
ng t
h
ese
lli
ng pr
i
ce o
f
a
d
e
li
vera
bl
e, e
li
m
i
nates t
h
e res
id
ua
l
met
h
o
d
o
f
a
ll
ocat
i
on, an
d
requires the application of relative sellin
g
price method in allocatin
g
the arran
g
ement consideration to al
l
d
eliverables. The new accountin
gg
uidance is effective for fiscal
y
ears be
g
innin
g
after June 1
5
, 2010. We are
c
urrent
l
yeva
l
uat
i
ng t
h
e
i
mpact o
f
t
h
enewgu
id
ance on our
fi
nanc
i
a
l
con
di
t
i
on an
d
resu
l
ts o
f
operat
i
ons.
In Januar
y
2010, the FASB issued new accountin
gg
uidance that requires new disclosures related to fair valu
e
m
easurements. T
h
enewgu
id
ance requ
i
res separate
di
sc
l
osure
f
or trans
f
ers
b
etween Leve
l
1an
d
2an
d
t
h
e act
i
v
i
t
i
es
i
nLeve
l
3 reconc
ili
at
i
on on a
g
ross
b
as
i
s. T
h
e new account
i
n
gg
u
id
ance
i
se
ff
ect
i
ve
f
or
fi
sca
ly
ears an
di
nter
im
periods be
g
innin
g
after December 1
5
, 2009, except for the new disclosures related to Level 3 activities, which ar
e
e
ffective for fiscal years and interim periods beginning after December 15, 2010. The new accounting guidance only
amen
d
e
d
t
h
e
di
sc
l
osure requ
i
rements re
l
ate
d
to
f
a
i
rva
l
ue measurements, t
h
ere
f
ore we
d
o not expect t
h
ea
d
opt
i
on to
h
ave an
y
impact on our financial condition or results of operations.
88
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)