Enom 2013 Annual Report Download - page 54

Value Added Services. We recognize revenue from online registrar value-added services, which include, but are not limited to, security
certificates, domain name identification protection, charges associated with alternative payment methodologies, web hosting services and email
services on a straight-line basis over the period in which services are provided. We include payments received in advance of services being
provided in deferred revenue .
Auction Service Revenue. Domain name auction service revenue represents proceeds received from selling domain names from our
portfolio, as well as proceeds received from selling domain names that are not renewed by customers of our registrar platform. Domain name
sales are primarily conducted through our direct sales efforts as well as through our NameJet joint venture. Domain name sales revenue is
recognized when title to the name is transferred to the buyer and the related registration fees are recognized on a straight-line basis over the
registration term. If we sell a domain name, any unamortized cost basis is recorded as a service cost. For domain name sales generated through
NameJet, we recognize revenue net of auction service fee payments to NameJet.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable primarily consist of amounts due from:
Our Registrar services are primarily conducted on a prepaid basis or through credit card or Internet payments processed at the time a
transaction is consummated and
we do not carry significant receivables related to these business activities. As a result and for each of the periods
presented, we did not maintain an allowance for potentially uncollectible receivables from our customers.
Receivables from registries represent amounts due from registries and from certain domain reseller customers of our registrar service
offering. Receivables from registries represent refundable amounts for registrations that were placed on auto-renew status by the registries, but
were not explicitly renewed by a registrant as of the balance sheet dates. Registry services accounts receivable is recorded at the amount of
registration fees paid by us to a registry for all registrations placed on auto-renew status. Subsequent to the lapse of a prior registration period, a
registrant either renews the applicable domain name with us, which results in the application of the refundable amount to a consummated
transaction, or the registrant lets the domain name registration expire, which results in a refund of the applicable amount from a registry to us.
We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables from our customers based on our best
estimate of the amount of probable losses from existing accounts receivable. We determine the allowance based on an analysis of historical bad
debts, advertiser concentrations, advertiser credit-worthiness and current economic trends. In addition, past due balances over 90 days and
specific other balances are reviewed individually for collectability on at least a quarterly basis.
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third parties who provide advertising services to our owned and operated websites and certain customer websites in exchange for a
share of the underlying advertising revenue. Accounts receivable from these advertising providers are recorded as the amount of the
revenue share as reported to us by them and are generally due within 30 to 45 days from the month-end in which the invoice is
generated. Certain accounts receivable from these providers are billed quarterly and are due within 45 days from the quarter-end in
which the invoice is generated, and are non
-
interest bearing;
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social media services customers and include: account set-up fees, which are generally billed and collected once set-up services are
completed; monthly recurring services, which are billed in advance of services on a quarterly or monthly basis; account overages,
which are billed when incurred and contractually due; and consulting services, which are generally billed in the same manner as set-
up
fees. Accounts receivable from social media customers are recorded at the invoiced amount, are generally due within 30 days and are
non
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interest bearing;
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direct advertisers who engage us to deliver branded advertising views. Accounts receivable from our direct advertisers are recorded at
negotiated advertising rates (customarily based on advertising impressions) and as the related advertising is delivered over our owned
and operated websites. Direct advertising accounts receivables are due within 30 to 60 days from the date the advertising services are
delivered and billed;
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customers who syndicate our content over their websites in exchange for a share of related advertising revenue. Accounts receivable
from our customers are recorded at the revenue share as reported by our customers and are due within 30 to 45 days; and
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certain domain reseller customers of our Registrar service offering.