Juno 2013 Annual Report Download - page 108

Table of Contents
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telephone company. In circumstances where payment is not received in advance, revenues are only recognized if collectibility is reasonably assured.
Advertising revenues from the Company's social networking services and from its Communications services consist primarily of amounts from its
Internet search partner that are generated as a result of users utilizing the partner's Internet search services, amounts generated from display
advertisements, and amounts generated from referring members to third-party websites or services. The Company recognizes such advertising revenues
in the period in which the advertisement is displayed or, for performance-based arrangements, when the related performance criteria are met. In
determining whether an arrangement exists, the Company ensures that a written contract is in place, such as a standard insertion order or a customer-
specific agreement. The Company assesses whether performance criteria have been met and whether the fees are fixed or determinable based on a
reconciliation of the performance criteria and the payment terms associated with the transaction. The reconciliation of the performance criteria generally
includes a comparison of the Company's internally-tracked performance data to the contractual performance obligation and, when available, to third-
party or customer-provided performance data.
Advertising and other revenues for the Company's loyalty marketing service consist primarily of fees generated when emails are transmitted to
members, when members respond to emails and when members complete online transactions. Each of these activities is a discrete, independent activity,
which generally is specified in the agreement with each advertising customer. As the earning activities take place, activity measurement data (examples
include the number of emails delivered and the number of responses received) is accumulated and the related revenues are recorded. The Company's
loyalty marketing service also generates revenues from the sale of gift cards.
The Company's social networking 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.
The Company's Communications products revenues are generated from the sale of mobile broadband service devices and the related shipping and
handling fees and are recognized upon delivery of such devices. Sales of mobile broadband service devices bundled with free 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 the Company's
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 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 service
plans are recognized ratably over the service period.
Probability of collection is assessed based on a number of factors, including past transaction history with the customer and the creditworthiness of
the customer. If it is determined that collectibility is not reasonably assured, revenue is not recognized until collectibility becomes reasonably assured,
which is generally upon receipt of cash.
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