Green Dot 2010 Annual Report Download - page 73

Note 2 — Summary of Significant Accounting Policies (continued)
complete and the software is ready for its intended use, we begin depreciating these costs on a straight-
line basis over the internal-use software’s estimated useful life.
Impairment of Long Lived Assets
We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. If the sum of expected undiscounted future
cash flows from an asset is less than the carrying amount of the asset, we recognize an impairment loss.
We measure the loss as the amount by which the carrying amount exceeds its fair value calculated using
the present value of estimated net future cash flows. Included in other general and administrative
expenses in our consolidated statements of operations for the year ended December 31, 2010, the five
months ended December 31, 2009 and the year ended July 31, 2009 were $409,000, $77,000 and
$405,000, respectively, of recognized impairment losses on internal-use software. We identified no
indicators of impairment during the year ended July 31, 2008.
Amounts Due to Card Issuing Banks for Overdrawn Accounts
Our card issuing banks fund overdrawn cardholder account balances on our behalf. Amounts funded
are due from us to the card issuing banks based on terms specified in the agreements with the card issuing
banks. Generally, we expect to settle these obligations within 12 months.
Amounts Due Under Line of Credit
After a consumer purchases a new card or cash transfer product at a retail location, we make the
funds immediately available once the consumer goes online or calls a toll-free number to activate the new
card or add funds from a cash transfer product. Since our retail distributors do not remit funds to our card
issuing banks, on average, for three business days, we maintain a line of credit with certain card issuing
banks that is available to fund any cash requirements related to the timing difference between funds
remitted by our retail distributors to the card issuing banks and funds utilized by consumers. We repay any
draws on this line of credit when our retail distributors remit the funds to the card issuing banks’ bank
accounts.
Revenue Recognition
Our operating revenues consist of card revenues, cash transfer revenues and interchange revenues.
We recognize revenue when the price is fixed or determinable, persuasive evidence of an arrangement
exists, the product is sold or the service is performed, and collectibility of the resulting receivable is
reasonably assured.
Card revenues consist of new card fees, monthly maintenance fees, ATM fees, and other revenues.
We charge new card fees when a consumer purchases a new card in a retail store. We defer and recognize
new card fee revenues on a straight-line basis over our average card lifetime, which is currently nine
months for our GPR cards and six months for our gift cards. We determine the average card lifetime based
on our recent historical data for comparable products. We measure card lifetime for our GPR cards as the
period of time, inclusive of reload activity, between sale (or activation) of the card and the date of the last
positive balance. We measure the card lifetime for our gift cards as the redemption period during which
cardholders perform the substantial majority of their transactions. We reassess average card lifetime
quarterly. We report the unearned portion of new card fees as a component of deferred revenue in our
consolidated balance sheets. We charge maintenance fees on a monthly basis pursuant to the terms and
conditions in the applicable cardholder agreements. We recognize monthly maintenance fees ratably over
the month for which they are assessed. We charge ATM fees to cardholders when they withdraw money or
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GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)