Juno 2013 Annual Report Download - page 103

Table of Contents
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

At December 31, 2013, one customer comprised approximately 11% of the Company's consolidated accounts receivable balance. At December 31,
2012, the Company did not have any individual customers that comprised more than 10% of the consolidated accounts receivable balance. For the years
ended December 31, 2013, 2012 and 2011, the Company did not have any individual customers that comprised more than 10% of total revenues.
—Inventories consist of finished goods, including gift cards related to the Company's member redemption liability, mobile broadband
service devices, and modems. Inventories are stated at the lower of cost or market value. Inventories are valued using the first-in-first-out ("FIFO")
method. Inventories also consist of work-in-process mobile broadband service devices, which have not yet been loaded with Company firmware
required for functionality. The Company's management regularly assesses the valuation of inventory and reviews inventory quantities on hand and, if
necessary, records a provision for excess and obsolete inventory based primarily on the age of the inventory and forecasts of product demand, as well
as markdowns for the excess of cost over the amount we expect to realize from the sale of certain inventory. The Company recorded a $0.6 million loss
and a $1.2 million loss on the markdown of mobile broadband service inventory-related balances during the years ended December 31, 2013 and 2012,
respectively. The Company had no inventory markdowns during the year ended December 31, 2011.
—Property and equipment are stated at historical cost less accumulated depreciation and amortization. Depreciation is
computed using the straight-line method over the estimated useful lives of the assets, which is generally two to three years for computer software and
equipment and three to seven years for furniture and fixtures. Leasehold improvements, which are included in furniture and fixtures, are amortized using
the straight-line method over the shorter of the lease term or seven years. Upon the sale or retirement of property or equipment, the cost and related
accumulated depreciation or amortization is removed from the Company's consolidated financial statements with the resulting gain or loss reflected in
the Company's consolidated statements of operations. Repairs and maintenance costs are expensed as incurred.
—The Company applies the provisions of ASC 815, . The Company enters into forward foreign
currency exchange contracts to reduce the risk that its cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations.
The Company records derivative instruments in other current assets or accrued liabilities in the consolidated balance sheets at fair value. The Company
records changes in the fair value (i.e., gains or losses) of derivatives as other income, net, or technology and development expenses in the consolidated
statements of operations or in accumulated other comprehensive loss in the consolidated balance sheets. The forward foreign currency exchange
contracts do not contain any credit risk-related contingent features. The Company's hedging program is not designed for trading or speculative purposes.
Net Investment Hedges—For derivative instruments that are designated and qualify as a hedge of a net investment, the gain or loss is reported in
accumulated other comprehensive loss in the consolidated balance sheets to the extent the hedge is effective, with the related amounts due to or from
counterparties included in accrued liabilities or other current assets, respectively. The Company utilizes the forward-rate method of assessing hedge
effectiveness. Gains or losses related to any ineffective portions of net investment hedges are recognized in other income, net in the consolidated
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