Support.com 2011 Annual Report Download - page 43

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Trade accounts receivable are recorded at the invoiced amount. We perform evaluations of our customers’ financial condition and generally do
not require collateral. We make judgments as to our ability to collect outstanding receivables and provide allowances for a portion of receivables when
collection becomes doubtful. Reserves are made based on a specific review of all significant outstanding invoices. For those invoices not specifically
provided for, reserves are recorded at differing rates, based on the age of the receivable. In determining these rates, we analyze our historical collection
experience and current payment trends. The determination of past-due accounts is based on contractual terms.
The following table summarizes the allowance for doubtful accounts as of December 31, 2011 and 2010 (in thousands):
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
  
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
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  
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  
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 
Allowance for doubtful accounts:
Year ended December 31, 2010 $ 9 $ 34 $ — $ 43
Year ended December 31, 2011 $ 43 $ (16) $ (7) $ 20
As of December 31, 2011, Comcast, Office Depot, Office Max and Staples accounted for 41%, 15%, 13% and 17% of our total accounts
receivable, respectively. As of December 31, 2010, Office Depot, Office Max and Staples accounted for 57%, 12% and 21%, of our total accounts
receivable, respectively. No other customers accounted for 10% or more of our total accounts receivable in 2011 or 2010.
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All liquid instruments with an original maturity at the date of purchase of 90 days or less are classified as cash equivalents. Cash equivalents
and short-term investments consist primarily of money market funds, certificates of deposit, commercial paper, corporate and municipal bonds. Our
interest income on cash, cash equivalents and investments is recorded monthly and reported as interest income and other in our consolidated
statements of operations.
Prior to June 30, 2010 we held certain auction-rate securities (“ARS”) with UBS. On June 30, 2010, we exercised our rights under the Rights
Agreement with UBS (the “put option”) and settled the ARS for cash on June 30 and July 1, 2010. As of December 31, 2011 and 2010, there were
no ARS held by UBS as a result of this exercise. Long-term investments consist of other ARS positions not held with UBS. Our cash equivalents
and short-term and long-term investments are classified as available-for-sale, and are reported at fair value with unrealized gains(losses) (when
deemed to be temporary) included in accumulated other comprehensive income within stockholders’ equity on the consolidated balance sheets. Prior to
their sale the ARS held by UBS were classified as trading securities and were reported at fair value with realized gains(losses) included in interest
income and other, net in the consolidated statements of operations. For the twelve months ended December 31, 2010, we recorded a realized loss of
$1.3 million on re-valuation of the ARS put option, offset with a realized gain of $1.3 million on the ARS held by UBS, for a net realized gain(loss)
of zero. For the year ended December 31, 2009, we recorded realized losses of $5.9 million on the ARS put option re-valuation, which was offset by
realized gains of $5.9 million on the UBS ARS, for a net realized gain(loss) of zero. This was due to the put option re-valuation fully offsetting the
UBS ARS re-valuation.
We monitor our investments for impairment on a quarterly basis and determine whether a decline in fair value is other-than-temporary by
considering factors such as current economic and market conditions, the credit rating of the security’s issuer, the length of time an investment’s fair
value has been below our carrying value, the Company’s intent to sell the security and the Company’s belief that it will not be required to sell the
security before the recovery of its amortized cost. If an investment’s decline in fair value is deemed to be other-than-temporary, we reduce its carrying
value to its estimated fair value, as determined based on quoted market prices or liquidation values. Declines in value judged to be other-than-
temporary, if any, are recorded in operations as incurred. At December 31, 2011, the Company evaluated its unrealized losses on available-for-sale
securities and determined them to be temporary. The ARS investments have been in a continuous unrealized loss position for more than 12
months. In accordance with ASC 320-2, , the Company concluded that it does not intend to sell the security
with an unrealized loss and it will not be required to sell the security before the recovery of its amortized cost basis.
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