Enom 2010 Annual Report Download - page 118

Table of Contents
Demand Media, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(In thousands, except per share amounts)
2. Summary of Significant Accounting Policies (Continued)
Assets and liabilities carried at fair value on a recurring basis using significant unobservable inputs (Level 3) were as follows:
Series C
Preferred
Stock
Warrants
Balance at December 31, 2007 $ 593
Change in fair value included in other income (expense) (350)
Exchanges (77)
Balance at December 31, 2008 166
Change in fair value included in other income (expense) 59
Balance at December 31, 2009 225
Change in fair value included in other income (expense) 252
Balance at December 31, 2010 $ 477
Reclassifications
Certain prior year amounts have been reclassified to conform with the current year presentation.
Recent Accounting Pronouncements
In October 2009, the FASB issued Update No. 2009-13, Revenue Recognition (Topic 605)—Multiple-Deliverable Revenue Arrangements a consensus
of the FASB Emerging Issues Task Force ("ASU 2009-13"). ASU 2009-13 provides amendments to the criteria in ASC 605-25 "Multiple-Element
Arrangements" for separating consideration in multiple-deliverable arrangements. As a result of those amendments, multiple-deliverable arrangements will be
separated in more circumstances than under existing accounting guidance. ASU 2009-13: (1) establishes a selling price hierarchy for determining the selling
price of a deliverable, (2) eliminates the residual method of allocation and requires that arrangement consideration be allocated at the inception of the
arrangement to all deliverables using the relative selling price method, (3) requires that a vendor determine its best estimate of selling price in a manner that is
consistent with that used to determine the price to sell the deliverable on a standalone basis and (4) significantly expands the disclosures related to a vendor's
multiple-deliverable revenue arrangements. ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal
years beginning on or after June 15, 2010. Alternatively, the Company may retrospectively apply the guidance to all periods. The Company adopted ASU
2009-13 using the prospective method on January 1, 2011 and the adoption of this accounting standard did not have a material effect on the Company's
financial position or results of operations.
In October 2009, the FASB issued Update No. 2009-14, Software (Topic 985)—Certain Revenue Arrangements That Include Software Elements, a
consensus of the FASB Emerging Issues Task Force ("ASU 2009-14"). ASU 2009-14 changes the accounting model for revenue arrangements that include
both tangible products and software elements and provides additional guidance on how to determine which software, if any, relating to tangible product would
be excluded from the scope of the software revenue guidance. In addition, ASU 2009-14 provides guidance on how a vendor should allocate
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