Expedia 2009 Annual Report Download - page 83

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Expedia, Inc.
Notes to Consolidated Financial Statements — (Continued)
Cash and Cash Equivalents
Our cash and cash equivalents include cash and liquid financial instruments with maturities of 90 days or
less when purchased.
Short-term Investments
Our short-term investments consist of time deposits with financial institutions held by eLong with maturities
greater than 90 days but less than one year.
Accounts Receivable
Accounts receivable are generally due within thirty days and are recorded net of an allowance for doubtful
accounts. We consider accounts outstanding longer than the contractual payment terms as past due. We
determine our allowance by considering a number of factors, including the length of time trade accounts
receivable are past due, previous loss history, a specific customer’s ability to pay its obligations to us, and the
condition of the general economy and industry as a whole.
Prepaid Expenses and Other Current Assets
At December 31, 2009 and 2008, we had $5 million and $16 million in redemptions of money market
holdings due from the Reserve Primary Fund (the “Fund”), which has been liquidating since the fourth quarter of
2008. As of December 31, 2009, we had received $75 million, of the original $80 million we reclassified from
cash and cash equivalents to prepaid expenses and other current assets during 2008. In January 2010, we received
a $5 million distribution from the Fund.
Property and Equipment
We record property and equipment at cost, net of accumulated depreciation and amortization. We also
capitalize certain costs incurred related to the development of internal use software. We capitalize costs incurred
during the application development stage related to the development of internal use software. We expense costs
incurred related to the planning and post-implementation phases of development as incurred.
We compute depreciation using the straight-line method over the estimated useful lives of the assets, which
is three to five years for computer equipment, capitalized software development and furniture and other
equipment. We amortize leasehold improvement using the straight-line method, over the shorter of the estimated
useful life of the improvement or the remaining term of the lease.
We establish assets and liabilities for the present value of estimated future costs to return certain of our
leased facilities to their original condition under the authoritative accounting guidance for asset retirement
obligations. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities
are accreted to the future value of the estimated restoration costs.
Recoverability of Goodwill and Indefinite-Lived Intangible Assets
Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business
combination as of the acquisition date. We assess goodwill and indefinite-lived intangible assets, neither of
which is amortized, for impairment annually as of October 1, or more frequently, if events and circumstances
indicate impairment may have occurred. See Note 5 —Goodwill and Intangible Assets, Net for discussion of
impairment of goodwill and indefinite-lived assets in 2008.
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