Incredimail 2013 Annual Report Download - page 104

PERION
NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Perion Network Ltd. ("Perion") and its wholly-
owned subsidiaries (collectively referred to as the "Company"), is a digital media
company that provides products and services to consumers, focusing on second wave adopters. The Company generates revenues
primarily through search, the sale of premium products and services, and advertising. The Company’
s products include
primarily: IncrediMail, a communication client; Smilebox, a photo sharing and social expression product and service; and Sweet
IM, an instant messaging application.
The Company was incorporated under the laws of Israel in 1999 and commenced operations in 2000.
On January 2, 2014 the Company completed the acquisition with Client Connect (refer to note 14 for further discussion). In
connection with the acquisition, the Company incurred expenses in the amount of $6,200 .
These expenses are included in the
general and administration expenses.
Commencing in 2014, the ClientConnect acquisition will be reflected in the Company's financial statements as reverse
acquisition of all of Perion's outstanding shares and options by ClientConnect in accordance with Accounting Standards
Codification Topic 805, "Business Combinations," ("ASC 805") using the acquisition method of accounting whereby
ClientConnect will be deemed the accounting acquirer and the Company will be deemed the accounting acquiree. In accordance
with the ASC 805 presentation requirement, following the acquisition, the Company's 2014 financial statements will include
Clientconnect's comparative numbers, namely, consolidated balance sheets as of December 31, 2013, and the related
consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for each of the two
years in the period ended December 31, 2013.
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.
The reporting currency of the Company is the U.S. dollar. Most of the Company’
s revenues are generated in U.S. dollars
("dollar"). In addition, a substantial portion of the Company’
s costs are incurred in dollars. The Company's management
believes that the dollar is the currency of the primary economic environment in which it operates. Thus, the Company’
s
functional currency 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.
NOTE 1:- GENERAL
NOTE 2:
-
SIGNIFICANT ACCOUNTING POLICIES
a.
Use of estimates:
b.
Financial statements in U.S. dollars:
F
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