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IHEARTCOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
79
(In millions)
Years Ended December 31,
2014
2013
2012
Barter and trade revenues
$
69.4
$
66.0
$
56.5
Barter and trade expenses
68.1
58.5
58.8
Advertising Expense
The Company records advertising expense as it is incurred. Advertising expenses were $103.0 million, $133.7 million and
$113.4 million for the years ended December 31, 2014, 2013 and 2012, respectively.
Share-Based Compensation
Under the fair value recognition provisions of ASC 718-10, share-based compensation cost is measured at the grant date based on the
fair value of the award. For awards that vest based on service conditions, this cost is recognized as expense on a straight-line basis
over the vesting period. For awards that will vest based on market or performance conditions, this cost will be recognized when it
becomes probable that the performance conditions will be satisfied. Determining the fair value of share-based awards at the grant date
requires assumptions and judgments about expected volatility and forfeiture rates, among other factors.
The Company does not have any equity incentive plans under which it grants stock awards to employees. Employees of subsidiaries of
the Company receive equity awards from Parent’s equity incentive plan or CCOH’s equity incentive plan.
Foreign Currency
Results of operations for foreign subsidiaries and foreign equity investees are translated into U.S. dollars using the average exchange
rates during the year. The assets and liabilities of those subsidiaries and investees are translated into U.S. dollars using the exchange
rates at the balance sheet date. The related translation adjustments are recorded in a separate component of shareholder’s deficit,
“Accumulated other comprehensive loss”. Foreign currency transaction gains and losses are included in operations.
New Accounting Pronouncements
During the first quarter of 2014, the Company adopted the Financial Accounting Standards Board’s (“FASB”) ASU No. 2013-04,
Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the
Reporting Date. This update provides guidance for the recognition, measurement and disclosure of obligations resulting from joint
and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the
reporting date. The amendments were effective for fiscal years (and interim periods within) beginning after December 15, 2013 and
were to be applied retrospectively to all prior periods presented for such obligations that existed at the beginning of an entity’s fiscal
year of adoption. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.
During the first quarter of 2014, the Company adopted the FASB’s ASU No. 2013-05, Parent’s Accounting for the Cumulative
Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity of an Investment in a
Foreign Entity. The amendments were effective prospectively for the fiscal years (and interim periods within) beginning after
December 15, 2013 and provide clarification guidance for the release of the cumulative translation adjustment under current U.S.
GAAP. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements
During the first quarter of 2014, the Company adopted the FASB’s ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit
When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This update requires
unrecognized tax benefits to be offset against a deferred tax asset for a net operating loss carryforward, similar tax loss or tax credit
carryforward in certain situations. The amendments were effective prospectively for the fiscal years (and interim periods within)
beginning after December 15, 2013. The adoption of this guidance did not have a material effect on the Company’s consolidated
financial statements.
During the second quarter of 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. This new standard
provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will
supersede virtually all of the current revenue recognition guidance under U.S. GAAP. The standard is effective for the first interim
period within annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of the
provisions of this new standard on its financial position and results of operations.