ServiceMagic 2009 Annual Report Download - page 70

Table of Contents
IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
All other revenue earned by the Media & Other segment is recognized either when the services are rendered or the merchandise is
delivered.
Cash and Cash Equivalents
Cash and cash equivalents include cash and short-term investments, with maturities of less than 91 days from the date of purchase.
Domestically, short-term investments are primarily comprised of AAA rated treasury and government agency money market funds, commercial
paper rated A1/P1 or better and treasury discount notes. Internationally, short-term investments are primarily comprised of AAA rated treasury,
government agency and prime money market funds and time deposits.
Marketable Securities
The Company invests in certain marketable securities, which consist primarily of short-to-intermediate-term debt securities issued by the
U.S. government, U.S. government agencies, states of the U.S. and subdivisions thereof and investment grade corporate issuers. The Company
only invests in marketable securities with active secondary or resale markets to ensure portfolio liquidity and the ability to readily convert
investments into cash to fund current operations, or satisfy other cash requirements as needed. All marketable securities are classified as
available-for-sale and are reported at fair value. The unrealized gains and losses on marketable securities, net of tax, are included in accumulated
other comprehensive income as a separate component of shareholders' equity. The specific-identification method is used to determine the cost of
a security sold or the amount of unrealized gains and losses reclassified from accumulated other comprehensive income into earnings.
The Company employs a methodology that considers available evidence in evaluating potential other-than-temporary impairment of its
investments. Investments are considered to be impaired when a decline in fair value below the amortized cost basis is determined to be other-
than-temporary. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair
value has been less than the amortized cost basis, the financial condition and near-term prospects of the issuer, and whether it is not more likely
than not that the Company will be required to sell the security before the recovery of the amortized cost basis, which may be maturity. If a
decline in fair value is determined to be other-than-temporary, an impairment charge is recorded in current earnings and a new cost basis in the
investment is established. See Note 6 for discussion of impairment charges recorded in 2009 and 2008.
Accounts Receivable
Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. Accounts receivable outstanding
longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors,
including the length of time accounts receivable are past due, the Company's previous loss history, the specific customer's ability to pay its
obligation to the Company and the condition of the general economy and the customer's industry. The Company writes off accounts receivable
when they become uncollectible. The Company also maintains allowances to reserve for potential credits issued to customers or other revenue
adjustments. The amount of these reserves are based, in part, on historical experience.
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