Overstock.com 2015 Annual Report Download - page 44

Both direct and partner revenues are seasonal, with revenues historically being the highest in the fourth quarter, which ends December 31, reflecting
higher consumer holiday spending. We anticipate this will continue in the foreseeable future.
Generally, we require verification of receipt of payment, or authorization from credit card or other payment vendors whose services we offer to our
customers (such as PayPal and BillMeLater), before we ship products to consumers or business purchasers. From time to time we grant credit to our business
purchasers with normal credit terms (typically 30 days). For sales in our partner business, we generally receive payments from our customers before our
payments to our suppliers are due.
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We offer additional products or services that complement our primary offerings, but are not significant to our revenues. These include:
• Medici, doing business as tØ.com, through which we have developed various fintech and crypto software products and intellectual property,
including proprietary blockchain software;
• Worldstock Fair Trade, a store within our Website that offers handcrafted products made by artisans all over the world to help improve the lives of
people in emerging economies;
• Main Street Revolution, a store within our Website that features products from small businesses across the United States who offer their products
using our national marketing and distribution channels;
• Supplier Oasis, a single integration point through which our partners can manage their products, inventory and sales channels, while tapping into
our distribution network;
• ecommerce marketplace channels, where some of our products are offered for sale in on-line marketplaces of other Internet retailers' websites;
• our international business where we offer products to customers outside the United States using U.S.-based third party logistics providers;
• Pet Adoptions, a free service and tab within our Website that leverages our technology to display pets available for adoption from shelters across the
United States;
• Farmers Market, a tab within our Website where our customers can order locally grown fresh produce and other food products;
• Insurance, a tab within our Website where our customers can shop for insurance from major carriers for both personal and business insurance
policies; and
• an online car listing service which allows sellers to list vehicles for sale and allows buyers to review vehicle descriptions and post offers to purchase,
and provides the means for prospective purchasers to contact sellers for further information and negotiations on the purchase of an advertised
vehicle.
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The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires estimates and
assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the
consolidated financial statements and accompanying notes. The Securities and Exchange Commission ("SEC") has defined a company's critical accounting
policies as the ones that are most important to the portrayal of the company's financial condition and results of operations, and which require the company to
make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this
definition, we have identified the critical accounting policies, estimates and judgments addressed below. We also have other key accounting policies, which
involve the use of estimates, judgments, and assumptions that are significant to understanding our results. For additional information, see Item 15 of Part IV,
"Financial Statements"—Note 2. Accounting Policies. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based
upon information presently available. Actual results may differ significantly from these estimates. Our critical accounting policies are as follows:
• revenue recognition;
• estimating valuation allowances and accrued liabilities (specifically, the allowances for returns and obsolete and damaged inventory);
• internal use software and website development (acquired and developed internally);
• accounting for income taxes;
• the valuation and impairment evaluation of long-lived assets including goodwill and intangible assets other than goodwill; and
• loss contingencies.
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