TiVo 2004 Annual Report Download - page 63

Table of Contents
Index to Financial Statements
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with original maturities of three months or less. The carrying value of the cash and cash
equivalents approximates their fair value.
Short-term Investments
Short-term investments include corporate debt securities and U.S. Government Agency debt securities. Marketable securities are classified as available-
for-sale and are carried at fair value. The Company's marketable securities are reviewed each reporting period for declines in value that are considered to be
other-than temporary and, if appropriate, written down to their estimated fair value. Realized gains and losses and declines in value judged to be other-than-
temporary on available-for-sale securities are included in the Company's consolidated statement of operations. Unrealized gains and losses would be included
in other comprehensive income (loss). The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified
as available-for-sale are included in interest income in the consolidated statement of operations.
Finished Goods Inventories
TiVo maintains a finished goods inventory of the TiVo-enabled DVRs throughout the year. Inventories are stated at the lower of cost or net realizable
value on an aggregate basis, with cost determined using the first-in, first-out method.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over estimated useful lives as follows:
Furniture and fixtures 3-5 years
Computer and office equipment 3-5 years
Lab equipment 3 years
Leasehold improvements
The shorter of 7 years or the
life of the lease
Capitalized software for internal use 1-5 years
Maintenance and repair expenditures are expensed as incurred.
Capitalized Software
Costs of computer software to be sold, leased or otherwise marketed have been accounted for in accordance with SFAS No. 86, "Accounting for the
Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed." The Company achieves technological feasibility upon development of a working
model. The period between the development of a working model and the release of the final product to customers is short and, therefore, the development
costs incurred during this short period are immaterial and, as such, are not capitalized. The software acquired in connection with the Strangeberry Inc.
("Strangeberry") acquisition had achieved technological feasibility as of the date of the acquisition, as a working model had existed for this product.
Intangible Assets
Purchased intangible assets include patent rights carried at cost less accumulated amortization. Useful lives generally range from three years to five
years.
Deferred Rent and Other Long-Term Liabilities
Deferred rent and other long-term liabilities consist primarily of accrued rent resulting from the recognition of the escalating lease payments related to
rent and related property taxes and insurance for the Company's corporate headquarters office buildings. Additionally included are liabilities as a result of the
Company's TiVo rewards program, a customer loyalty program.
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