Tucows 2015 Annual Report Download - page 188

The fair value of cash and cash equivalents, accounts receivable, accounts payable, accreditation fees payable,
customer deposits and accrued liabilities (level 2 measurements) approximate their carrying values due to the relatively
short periods to maturity of the instruments.
The fair value of the derivative financial instruments are determined using an estimated credit-adjusted mark-to-
market valuation (a level 2 measurement) which takes into consideration the Company and the counterparty credit risk.
(r) Segment reporting
The Company operates in three operating segments, Domain Services, Network Access – Mobile Services and
Network Access – Other Services.
The Company’s Domain Services revenues are attributed to the country in which the contract originates, primarily
Canada. Revenues from domain names issued from the Toronto, Canada location are attributed to Canada because it is
impracticable to determine the country of the customer. The Company’s Network Access – Mobile Services revenues,
which consist primarily of mobile telephony services, are generated through its business operations in the United States.
The Company’s Network Access - Other Services consists of the provisioning of high speed Internet access, Internet
hosting and consulting services.
The Company’s assets are located in Canada, the United States, Germany and the Netherlands.
(s) Recent Accounting Pronouncements
Recent Accounting Pronouncements Adopted
On January 1, 2015, the Company adopted the Accounting Standards Update (“2014-08”), Presentation of
Financial Statements and Property, Plant and Equipment: Discontinued Operations and Disclosures of Disposals of
components of an Entity. The adoption of ASU 2014-08 did not have a material impact on the consolidated financial
statements.
Recent Accounting Pronouncements Not Yet Adopted
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) 2016-02, Leases (Topic 842)." The standard requires lessees to recognize the assets and liabilities that arise
from leases on the balance sheet. A lessee should recognize in the balance sheet a liability to make lease payments
(the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The
new guidance is effective for annual and interim reporting periods beginning after December 15, 2018 (January 1,
2019 for the Company). The amendments should be applied at the beginning of the earliest period presented using a
modified retrospective approach with earlier application permitted as of the beginning of an interim or annual
reporting period. The Company will adopt this guidance in the first quarter of fiscal 2019 and is currently evaluating
the impact of the new guidance on its consolidated financial statements.
In January 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-01, Financial Instruments –
Overall (Subtopic 825-10) which relates to the recognition and measurement of financial assets and financial
liabilities. ASU 2016-01 requires that all equity investments (except those accounted for under the equity method of
accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value
recognized in net income. The new guidance requires the performance of a qualitative assessment for equity
investments without readily determinable fair values. The update also requires an entity to present separately in other
comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the
instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the
fair value option for financial instruments. The guidance is effective for annual and interim reporting periods
beginning after December 15, 2017 (January 1, 2018 for the Company). Earlier adoption is not permitted. The
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