Twenty-First Century Fox 2014 Annual Report Download - page 91

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TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
85
Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in
market value and other factors influencing the fair market value, such as general market conditions.
The Company regularly reviews available-for-sale investment securities for other-than-temporary impairment
based on criteria that include the extent to which the investment’s carrying value exceeds its related market value,
the duration of the market decline, the Company’s ability to hold until recovery and the financial strength and
specific prospects of the issuer of the security.
The Company regularly reviews investments accounted for at cost for other-than-temporary impairment based
on criteria that include the extent to which the investment’s carrying value exceeds its related estimated fair value,
the duration of the estimated fair value decline, the Company’s ability to hold until recovery and the financial
strength and specific prospects of the issuer of the security.
Long-lived assets
ASC 360, “Property, Plant, and Equipment,” and ASC 350 require that the Company periodically review the
carrying amounts of its long-lived assets, including property, plant and equipment and finite-lived intangible assets,
to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. If
the carrying amount of the asset is greater than the expected undiscounted cash flows to be generated by such asset,
an impairment adjustment is recognized if the carrying value of such asset exceeds its fair value. The Company
generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash
flows using an appropriate discount rate. Considerable management judgment is necessary to estimate the fair value
of assets; accordingly, actual results could vary significantly from such estimates. Assets to be disposed of are
carried at the lower of their financial statement carrying amount or fair value less their costs to sell.
Guarantees
The Company follows ASC 460, “Guarantees” (“ASC 460”). ASC 460 requires a guarantor to recognize, at
the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing certain guarantees.
Subsequently, the initial liability recognized for the guarantee is generally reduced as the Company is released from
the risk under the guarantee. The Company periodically reviews the facts and circumstances pertaining to its
guarantees in determining the level of related risk.
Revenue recognition
Revenue is recognized when persuasive evidence of an arrangement exists, the fees are fixed or determinable,
the product or service has been delivered and collectability is reasonably assured. The Company considers the terms
of each arrangement to determine the appropriate accounting treatment.
Cable Network Programming, Television and Direct Broadcast Satellite Television
Advertising revenue is recognized as the commercials are aired, net of agency commissions. Subscriber fees
received from MVPDs for Cable Network Programming and Television are recognized as affiliate fee revenue in the
period services are provided. Direct Broadcast Satellite Television subscription and pay-per-view revenues are
recognized when programming is broadcast to subscribers, while fees for equipment rental are recognized as
revenue on a straight-line basis over the contract period.
The Company classifies the amortization of cable distribution investments (capitalized fees paid to MVPDs to
facilitate carriage of a cable network) against affiliate fee revenue in accordance with ASC 605-50, “Revenue
Recognition—Customer Payments and Incentives.” The Company defers the cable distribution investments and
amortizes the amounts on a straight-line basis over the contract period.