Incredimail 2008 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2008 Incredimail 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 122

  • 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

F - 10
dollars (“dollars”). The Company’s management believes that the dollar is the primary currency of the economic environment in
which the Company operates. Thus, the functional and reporting currency of the Company is the dollar.
Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with
Statement of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency Translation”.
All transaction gains and losses of
the remeasured monetary balance sheet items are reflected in the statements of operations as financial income or expenses, as
appropriate.
c.
Principles of consolidation:
Intercompany balances and transactions have been eliminated upon consolidation.
d.
Cash equivalents:
The Company considers short-term unrestricted highly liquid investments that are readily convertible into cash, purchased with
original maturities of three months or less to be cash equivalents.
e.
Restricted cash:
Restricted cash is invested in bank deposits, which are pledged in favor of the bank which provides to the Company guarantees with
respect to office lease agreements and business credit.
INCREDIMAIL LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:
–
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
f.
Marketable securities and long
-
term investment:
The Company accounts for investments in debt securities in accordance with SFAS No. 115, “Accounting for Certain Investments
in Debt and Equity Securities”. Management determines the appropriate classification of its investments in debt and equity
securities at the time of purchase and reevaluates such determinations at each balance sheet date.
At December 31, 2007 and 2008, all marketable securities are designated as available-for-sale. Marketable securities classified as
“available-for-sale” are carried at fair value. Unrealized gains and losses, net of tax, are reported in a separate component of
shareholders’ equity in accumulated other comprehensive income. Gains and losses are recognized when realized, on a specific
identification basis, in the Company
’
s consolidated statements of operations.
In accordance with the Company’s policy and FASB Staff Position (“FSP”) Nos. SFAS 115-1 (FSP 115-1) and SFAS 124-1, “The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments”, the Company recognizes an
impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-
temporary. The
Company considers various factors in determining whether to recognize an impairment charge, including the Company’s intent and
ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value, the length of time
and extent to which the fair value has been less than the cost basis, the credit ratings of the securities and the financial condition and
near
-
term prospects of the issuers. As for other
-
than temporary impairment recognized in these financial statements, see note 3a.
g.
Property and equipment:
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method
over the estimated useful lives of the assets at the following annual rates:
%
Computers and peripheral equipment
33
Office furniture and equipment
7
-
15
Automobiles
15
Leasehold improvements are depreciated by the straight-line method over the term of the lease or the estimated useful life of the
improvements, whichever is shorter.
h.
Intangible assets: