Vonage 2010 Annual Report Download - page 67

V
O
NA
G
EH
O
LDIN
GS CO
RP
.
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(
In thousands, except per share amounts
)
Loss per
S
hare
B
as
i
can
d dil
ute
dl
oss per s
h
are
h
as
b
een compute
d
according to FA
S
BA
SC
260
,
“Earnings per
S
hare”
.
B
as
i
c
l
oss per s
h
are represents net
l
oss
di
v
id
e
db
yt
h
ewe
i
g
h
te
d
a
verage number of common shares outstanding during a
r
eported period. Diluted loss per share reflects the poten
-
tial dilution that could occur if securities or other contracts
to
i
ssue common stoc
k
,
i
nc
l
u
di
ng warrants, stoc
k
opt
i
ons,
a
nd restricted stock units under our 2001
S
tock Incentiv
e
P
lan and 2006 Incentive Plan
,
and the
C
onvertible Notes
,
were exerc
i
se
d
or converte
di
nto common stoc
k
.
The
e
ffects of potentially dilutive common shares, includin
g
sh
ares attr
ib
uta
bl
e to our outstan
di
ng common stoc
k
warrant an
d
our restr
i
cte
d
stoc
k
un
i
ts an
d
stoc
k
opt
i
on
s
o
utstandin
g
usin
g
the treasury stock method, have bee
n
e
xcluded
f
rom the calculation o
f
diluted loss
p
er commo
n
s
hare because o
f
their anti-dilutive e
ff
ects. In applyin
g
the
treasury stock method
f
or stock-based compensatio
n
a
rran
g
ements, the assumed proceeds are computed as
the sum o
f
the amount the employee must pay upo
n
e
xercise and the amounts o
f
avera
g
e unreco
g
nize
d
c
om
p
ensation cost attributed to
f
uture services. In addi
-
tion, the e
ff
ects o
f
potentially dilutive common shares i
n
c
onnection with our Convertible Notes usin
g
th
e
i
f
-
co
nv
e
rt
ed
m
e
th
od
h
a
v
e bee
n
e
x
c
l
uded f
r
o
mth
eca
l
cu
-
lation o
f
diluted loss per common share because o
f
thei
r
a
nti-dilutive e
ff
ects is re
f
lected in diluted earnings pe
r
sh
are
.
The
f
ollowin
g
shares were excluded
f
rom the calculation o
f
diluted loss per share because o
f
their anti-dilutive e
ff
ects
:
F
or t
h
e
Y
ears
E
n
d
e
dD
ecem
b
er
3
1
,
20
1
0 2009 2008
C
ommon stock warrant
5
14 514 514
C
onvertible notes 10
,
421 19
,
638 62
,
069
R
estr
i
cte
d
stoc
k
un
i
t
s
2
,
332 2
,
792 3
,
100
E
mp
l
o
y
ee stoc
k
opt
i
on
s
3
5
,
729 28
,
528 29
,
22
7
4
8
,
996 51
,
472 94
,
910
C
omprehensive Income
(
Loss
)
C
omprehensive income
(
loss
)
consists of net loss
and other comprehensive items.
O
ther comprehensive
i
tems include foreign currency translation adjustments
and unrealized gains
(
losses
)
on available for sale invest-
ments. Assets and liabilities of foreign operations ar
e
t
rans
l
ate
d
at t
h
e per
i
o
d
-en
d
exc
h
ange rate an
d
revenu
e
an
d
expense amounts are trans
l
ate
d
at t
h
e average rates
of exchange prevailing during the period and represent
s
th
e
b
a
l
ance
i
n accumu
l
ate
d
ot
h
er compre
h
ens
i
ve
i
ncom
e
(
loss
).
S
hare-Based Com
p
ensatio
n
We account
f
or share-based com
p
ensation in accord
-
ance with FASB ASC 718,
“
Com
p
ensation-Stock
C
om
p
ensation”. Under the
f
air value reco
g
nition provi
-
s
ions o
f
this
p
ronouncement, share-based com
p
ensatio
n
cost is measured at the
g
rant date based on the
f
air valu
e
o
f
the award, reduced as a
pp
ro
p
riate based on estimated
f
or
f
eitures, and is reco
g
nized as expense over the appli-
cable vestin
g
period o
f
the stock award usin
g
the accel-
e
r
a
t
ed
m
e
th
od.
R
ecent
A
ccount
i
ng
P
ronouncements
In
O
ctober 2009, the FA
S
B issued Accounting
S
tan-
dards Update No. 2009-13
(
“A
S
U 2009-13”
)
“R
evenu
e
R
ecognition
(
Topic 605
)
, Multiple-Deliverable Revenu
e
Arrangements a consensus of the FA
S
B Emerging Issues
Task Force
(
“EITF”
)
”
.
T
his Accounting
S
tandards Update
p
rovides amendments to the criteria in FA
S
BA
SC
605-2
5
for separating consideration in multiple-deliverabl
e
arrangements. A
S
U 2009-13 changes existing rule
s
r
egarding recognition of revenue in multiple deliverable
arrangements an
d
expan
d
s ongo
i
ng
di
sc
l
osures a
b
out t
he
s
ignificant judgments used in applying its guidance. It wil
l
b
e effective for revenue arrangements entered into or
materially modified in the fiscal year beginning on or after
J
une 15, 2010.
E
ar
ly
a
d
opt
i
on
i
s perm
i
tte
d
on a pro
-
s
pect
i
ve or retrospect
i
ve
b
as
i
s.
W
e
d
o not expect t
he
adoption of A
S
U 2009-13 to have a material impact on
our financial statements
.
R
ec
l
ass
ifi
ca
ti
o
n
s
C
ertain reclassifications have been made to
p
rio
r
y
ears’
f
inancial statements in order to con
f
orm to the
current year’s presentation. The reclassi
f
ications had no
i
mpact on net earnin
g
s previously reported
.
F
-
12
VO
NA
G
E ANN
U
AL REP
O
RT 2010