Dish Network 2009 Annual Report Download - page 101

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DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-11
Marketable Investment Securities
We currently classify all marketable investment securities as available-for-sale. We adjust the carrying value of our
available-for-sale securities to fair value and report the related temporary unrealized gains and losses as a separate
component of “Accumulated other comprehensive income (loss)” within “Total stockholders’ equity (deficit),” net
of related deferred income tax. Declines in the fair value of a marketable investment security which are determined
to be “other-than-temporary” are recognized in the Consolidated Statements of Operations and Comprehensive
Income (Loss), thus establishing a new cost basis for such investment.
We evaluate our marketable investment securities portfolio on a quarterly basis to determine whether declines in the
fair value of these securities are other-than-temporary. This quarterly evaluation consists of reviewing, among other
things:
x the fair value of our marketable investment securities compared to the carrying amount,
x the historical volatility of the price of each security, and
x any market and company specific factors related to each security.
Declines in the fair value of investments below cost basis are generally accounted for as follows:
Length of Time
Investment Has Been In a
Continuous Loss Position
Treatment of the Decline in Value
(absent specific factors to the contrary)
Less than six months Generally, considered temporary.
Six to nine months
Evaluated on a case by case basis to determine whether any company or
market-specific factors exist which would indicate that such decline is
other-than-temporary.
Greater than nine months Generally, considered other-than-temporary. The decline in value is
recorded as a charge to earnings.
In situations where the fair value of a debt security is below its carrying amount, we consider the decline to be
other-than-temporary and record a charge to earnings if any of the following factors apply:
x we have the intent to sell the security.
x it is more likely than not that we will be required to sell the security before maturity or recovery.
x we do not expect to recover the security’s entire amortized cost basis, even if there is no intent to sell the
security.
In general, we use the first in, first out method to determine the cost basis on sales of marketable investment
securities.
Accounts Receivable
Management estimates the amount of required allowances for the potential non-collectability of accounts receivable
based upon past collection experience and consideration of other relevant factors. However, past experience may not
be indicative of future collections and therefore additional charges could be incurred in the future to reflect differences
between estimated and actual collections.
Inventory
Inventory is stated at the lower of cost or market value. Cost is determined using the first-in, first-out method. We
depend on EchoStar for the production of our receivers and many components of our receiver systems. Manufactured
inventory includes materials, labor, freight-in, royalties and manufacturing overhead.