Incredimail 2011 Annual Report Download - page 99

PERION NETWORK LTD. AND ITS SUBSIDIARIES
(Formerly: Incredimail Ltd.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 3:
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SIGNIFICANT ACCOUNTING POLICIES
a.
Use of estimates:
The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management
to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are
reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported
amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the
Company's management evaluates estimates, including those related to fair values and useful lives of intangible assets, fair values of stock-
based awards, income taxes, and contingent liabilities. Such estimates are based on historical experience and on various other assumptions that
are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
b. Financial statements in U.S. dollars:
The Company has operations in Israel and a significant portion of the Israeli expenses are currently paid in new Israeli shekels ("NIS");
however, the
markets for the Company's products are located outside of Israel and the Company generates most of its revenues in U.S. dollars
("dollars"). The Company's management believes that the dollar is the currency of the primary 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 Accounting
Standards Codification ("ASC") 830, "Foreign Currency Matters". All transaction gains and losses of the remeasured monetary balance sheet
items are reflected in the statement of income as financial income or expenses, as appropriate.
c. Principles of consolidation:
The consolidated financial statements include the accounts of Perion and its subsidiaries. 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.
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