Juno 2014 Annual Report Download - page 96

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Table of Contents




points issued, redemption activities and members' activity levels could materially impact the member redemption liability.
Points in active MyPoints accounts do not expire; however, unredeemed points expire after 12 consecutive months of inactivity. For purposes of the
member redemption liability, "inactive" means a lack of all of the following: email response; survey completion; profile update; and any point-earning or
point-redeeming transaction. The canceling or disabling of inactive MyPoints accounts would have no impact on the Company's consolidated financial
statements, as the Company fully considers inactive MyPoints accounts when establishing the member redemption liability, as discussed above.
—The Company measures its contingent consideration liability at fair value on a recurring basis using significant
unobservable inputs classified within Level 3 of the fair value hierarchy. Contingent consideration—fair value adjustment includes changes in fair value
measurements of the contingent consideration, as well as interest expense related to the contingent consideration, and is recorded in the consolidated
statements of operations. The current and noncurrent portions of the related liability are included in accrued liabilities and other liabilities, respectively, in
the consolidated balance sheets.
—The Company applies the provisions of ASC 605, , which provides guidance on the recognition,
presentation and disclosure of revenue in financial statements filed with the Securities and Exchange Commission ("SEC"). ASC 605 outlines the basic
criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. The Company recognizes
revenues 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.
Revenues are comprised of services revenues, which are derived primarily from fees charged to pay accounts; advertising and other revenues; and
products revenues, which are derived primarily from the sale mobile broadband service devices and mobile phones, including the related shipping and
handling fees; from the sale of yearbooks and yearbook reprints, including the related shipping and handling fees; and from the sale of third-party
merchandise.
Service revenues for the Company's Communications services and for its social networking services are derived primarily from fees charged to pay
accounts and are recognized in the period in which fees are fixed or determinable and the related services are provided to the customer. The Company's pay
accounts generally pay in advance for their services by credit card, PayPal, automated clearinghouse or check, and revenues are then recognized ratably over
the service period. Advance payments from pay accounts are recorded on the consolidated balance sheets as deferred revenue. The Company offers
alternative payment methods to credit cards for certain Communications pay service plans. These alternative payment methods currently include payment by
money order or payment through a local 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 Communications services and from its social networking 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
F-14