Juno 2012 Annual Report Download - page 59

Table of Contents
critical to aid in fully understanding and evaluating our reported financial results. These estimates and assumptions require management's most difficult,
subjective or complex judgment and may be based on matters, the effects of which are inherently uncertain.
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We apply the provisions of Accounting Standards Codification ("ASC") 605,  which provides guidance on the recognition,
presentation and disclosure of revenue in financial statements filed with the SEC. ASC 605 outlines the basic criteria that must be met to recognize
revenue and provides guidance for disclosure related to revenue recognition policies. We recognize revenue when persuasive evidence of an
arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, no significant Company obligations remain,
and collectibility is reasonably assured. Revenues exclude sales taxes collected.
—Products revenues and the related cost of revenues are recognized when products are delivered to the
customers, less discounts and refunds. Shipping and service fees charged to customers are recognized at the time the related products revenues are
recognized and are included in products revenues. Shipping and delivery costs are included in cost of revenues. FTD's consumer businesses generally
recognize revenues on a gross basis because FTD bears the risks and rewards associated with the revenue-generating activities by (i) acting as a
principal in the transaction; (ii) establishing prices; (iii) being responsible for fulfillment of the order by the floral network members and third-party
suppliers; (iv) taking the risk of loss for collection, delivery and returns; and (v) marketing the products and services.
FTD also sells point-of-sale systems and related technology services to its floral network members and recognizes revenue in accordance with
ASC 605 and ASC 985, . FTD recognizes revenue on hardware which is sold without software at the time of delivery. For hardware sales that
include software, revenue is recognized when delivery, installation and customer acceptance have all occurred.
Services revenues based on orders sent to floral network members are recognized in the period in which the orders are delivered. Monthly fees,
recurring fees and other floral network service-based fees are recognized in the period in which the related service is provided.
 —Revenues are comprised of product revenues, which are derived
primarily from the sale of yearbook reprints and related shipping fees, as well as from the sale of third-party merchandise; services revenues, which are
derived primarily from fees charged to pay accounts; and advertising and other revenues.
Our online nostalgia products revenues are derived from the sale of yearbook reprints and related shipping fees. Products revenues from the sale of
yearbook reprints are recognized upon delivery to the customer. Shipping fees charged to customers are recognized at the time the related products
revenues are recognized and are included in products revenues. Shipping costs are included in cost of revenues.
Our Communications products revenues are generated from the sale of NetZero 4G mobile broadband service devices and the related shipping and
handling fees and are recognized upon delivery of such devices. Sales of NetZero 4G mobile broadband service devices bundled with free or paid
service plans are allocated using the relative selling price method in accordance with the multiple-element arrangement provisions of ASC 605. The
selling prices of our NetZero 4G mobile broadband paid service plans are determined by vendor specific objective evidence, which is based upon the
monthly stand-alone selling price of each plan. The selling prices of the NetZero 4G mobile broadband service devices and free service plans are
determined by management's best estimate of selling price, which considers market and economic conditions, internal costs, pricing, and discounting
practices. The revenues allocated to the free or paid service plans are recognized ratably over the service period.
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