Overstock.com 2014 Annual Report Download - page 88
Download and view the complete annual report
Please find page 88 of the 2014 Overstock.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78 -
79 -
80 -
81 -
82 -
83 -
84 -
85 -
86 -
87 -
88 -
89 -
90 -
91 -
92 -
93 -
94 -
95 -
96 -
97 -
98 -
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
 |
 |
Table of Contents
described above. The amounts exchanged are calculated by reference to the notional amounts and by other terms of the derivatives, such as interest rates.
The following table shows the effect of derivative financial instruments that were designated as accounting hedges for the period indicated (in
thousands):
Year ended December 31, 2014
Interest rate swap
$ (621)
Interest expense
$ —
Interest expense
$ —
The following table provides the outstanding notional balances and fair values of derivative financial instruments that were designated as
accounting hedges outstanding positions for the dates indicated, and recorded gains/(losses) during the periods indicated (in thousands):
Year ended December 31, 2014
Interest rate swap
Other long-
term liabilities
2023
$ —
$ (1,008)
$ —
$ (1,008)
$ (1,008)
___________________________________________
(1) — There were no outstanding derivative instruments for the years ended December 31, 2013 and 2012.
(2) — Gains (losses) recorded during the period are presented gross of the related tax impact.
We derive our revenue primarily from direct revenue and partner revenue from merchandise sales. We also earn revenue from advertising on our
shopping and other pages. We have organized our operations into two principal segments based on the primary source of revenue: direct revenue and partner
revenue (see Note 21. Business Segments).
Revenue is recognized when the following revenue recognition criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has
occurred or the service has been provided; (3) the selling price or fee revenue earned is fixed or determinable; and (4) collection of the resulting receivable is
reasonably assured. Revenue related to merchandise sales is recognized upon delivery to our customers. As we ship high volumes of packages through
multiple carriers, it is not practical for us to track the actual delivery date of each shipment. Therefore, we use estimates to determine which shipments are
delivered and, therefore, recognized as revenue at the end of the period. Our delivery date estimates are based on average shipping transit times, which are
calculated using the following factors: (i) the type of shipping carrier (as carriers have different in-transit times); (ii) the fulfillment source (either our
warehouses, those warehouses we control, or those of our partners); (iii) the delivery destination; and (iv) actual transit time experience, which shows that
delivery date is typically one to eight business days from the date of shipment. We review and update our estimates on a quarterly basis based on our actual
transit time experience. However, actual shipping times may differ from our estimates.
We evaluate the criteria outlined in ASC Topic 605-45, , in determining whether it is appropriate to record the gross
amount of product sales and related costs or the net amount earned as commissions. When we are the primary obligor in a transaction, are subject to inventory
risk, have latitude in establishing prices and selecting suppliers, or have several but not all of these indicators, revenue is recorded gross. If we are not the
primary obligor in the transaction and amounts earned are determined using a fixed percentage, revenue is recorded on a net basis. Currently, the majority of
both direct revenue and partner revenue is recorded on a gross basis, as we are the primary obligor. We present revenue net of sales taxes.
87