Expedia 2015 Annual Report Download - page 97

Download and view the complete annual report

Please find page 97 of the 2015 Expedia annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 147

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147

Advertising. We record advertising revenue ratably over the advertising period or upon delivery of
advertising impressions, depending on the terms of the advertising contract. We record revenue from click-
through fees charged to our travel partners for traveler leads sent to the travel partners’ websites. We record
revenue from click-through fees after the traveler makes the click-through to the related travel partners’ websites.
Vacation Rental Listing and Other Ancillary Services. Payments for term-based paid subscriptions received
in advance of services being rendered are recorded as deferred revenue and recognized ratably on a straight-line
basis over the listing period. Revenue for performance-based listings is calculated as a percentage of the traveler
booking or a fixed fee-per-inquiry stated in the arrangement and recognized when the service has been performed
or as the customers’ refund privileges lapse, which is typically at check-in. Revenue from other ancillary
vacation rental services or products are recorded either upon delivery or when we provide the service.
Other. We record revenue from all other sources either upon delivery or when we provide the service.
Cash and Cash Equivalents
Our cash and cash equivalents include cash and liquid financial instruments, including money market funds
and time deposit investments, with maturities of three months or less when purchased.
Short-term and Long-term Investments
We determine the appropriate classification of our investments in marketable securities at the time of
purchase and reevaluate such designation at each balance sheet date. Based on our intent and ability to hold
certain assets until maturity, we may classify certain debt securities as held to maturity and measure them at
amortized cost. Investments classified as available for sale are recorded at fair value with unrealized holding
gains and losses recorded, net of tax, as a component of accumulated other comprehensive income. Realized
gains and losses from the sale of available for sale investments, if any, are determined on a specific identification
basis. Investments with remaining maturities of less than one year are classified within short-term investments.
All other investments with remaining maturities ranging from one year to five years are classified within long-
term investments and other assets.
We record investments using the equity method when we have the ability to exercise significant influence
over the investee. Equity investments without readily determinable fair values for which we do not have the
ability to exercise significant influence are accounted for using the cost method of accounting and classified
within long-term investments and other assets. Under the cost method, investments are carried at cost and are
adjusted only for other-than-temporary declines in fair value, certain distributions, and additional investments. As
of December 31, 2015 and 2014, we had $299 million and $12 million of cost method investments.
We periodically evaluate the recoverability of investments and record a write-down to fair value if a decline
in value is determined to be other-than-temporary.
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.
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.
F-12