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Table of Contents
SUPPORTSOFT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
fiscal year beginning January 1, 2009. Early adoption is prohibited. While the Company is currently evaluating the impact of adopting SFAS No. 160 on its
Consolidated Financial Statements, it does not expect the adoption of SFAS No. 160 to have a significant impact on its financial statements.
In March 2008, the FASB issued SFAS No. 161, “Disclosures About Derivative Instruments and Hedging Activities.” SFAS No. 161 is intended to
enhance the current disclosure framework in FASB Statement 133, “Accounting for Derivative Instrument and Hedging Activities.” SFAS No. 161 requires
enhanced disclosures about an entity’s derivative and hedging activities. SFAB No. 161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged. While the Company is currently evaluating the impact of adopting SFAS No. 161
on its Consolidated Financial Statements, it does not expect the adoption of SFAS No. 161 to have a significant impact on its financial statements.
In October 2008, the FASB issued FSP No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active.”
This FSP clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value
of a financial asset when the market for that financial asset is not active. In particular, it provides additional guidance on (a) how the reporting entity’s own
assumptions (that is, expected cash flows and appropriately risk-adjusted discount rates) should be considered when measuring fair value when relevant
observable inputs do not exist, (b) how available observable inputs in a market that is not active should be considered when measuring fair value, and (c) how the
use of market quotes (for example, broker quotes or pricing services for the same or similar financial assets) should be considered when assessing the relevance
of observable and unobservable inputs available to measure fair value. This FSP is effective upon issuance, including prior periods for which financial statements
have not been issued. The Company evaluated the impact of this FSP and concluded that its considerations in determining the fair value of its financial assets
when the market for them is not active are consistent with the FSP’s guidance.
Note 2. Segment Reporting
SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” establishes standards for the way in which public companies
disclose certain information about operating segments in their financial reports.
Prior to January 2008, we conducted our business in one segment. As such, segment results for fiscal years 2006 and 2007 would be impracticable to
reconstruct because we were not organized by business unit nor were costs and expenses tracked by business unit. In January 2008, we reorganized our Company
and created two business segments, Enterprise and Consumer. We began tracking profitability by segment and providing this information to our Board of
Directors and our Chief Executive Officer. Consistent with SFAS No. 131, we have defined two reportable segments, distinguished by: i) market characteristics;
ii) the nature of our products and services; iii) how we manage our operations; and iv) how our chief operating decision maker views results. We define the chief
operating decision maker as our Chief Executive Officer.
Revenue, cost of revenue and directly attributable expenses are provided on a segment basis, all other operating expenses are incorporated under corporate
costs.
Consumer Segment. In our Consumer segment, we provide premium technology support to consumers over the internet and the phone for a fee. We offer
incident-based and subscription services to consumers through retailers, anti-virus providers and other companies who provide technology products and services
to consumers. We also provide our services directly to consumers through our website, www.support.com.
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Source: SUPPORTSOFT INC, 10-K, March 11, 2009