2.2.0.25falsefalse1020 - Disclosure - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIEStruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010 USD ($) USD ($) / shares $D2010http://www.sec.gov/CIK0001354513duration2010-01-01T00:00:002010-12-31T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170USDPerShareDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0ctcm_BasisOfPresentationAndSummaryOfSignificantAccountingPoliciesDisclosureAbstractctcmfalsenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalseBASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES3false0ctcm_BasisOfPresentationPrinciplesOfConsolidationSummaryOfSignificantAccountingPoliciesAndRecentlyIssuedAccountingPronouncementsTextBlockctcmfalsenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse00<table style="font-size:10pt; font-family:'Times New Roman',times,serif;"> <tr> <td>   2.     BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation         Wholly owned subsidiaries and majority owned ventures where the Company has operating and financial control, as well as variable interest entities where the Company has been deemed the primary beneficiary, are consolidated. Those ventures where the Company exercises significant influence, but does not exercise operating and financial control, are accounted for under the equity method. The Company uses the purchase method of accounting for all business combinations. Results of subsidiaries acquired and accounted for under the purchase method are included in operations from the date of acquisition. Noncontrolling interests represent a noncontrolling shareholder's proportionate share of the equity in certain of the Company's consolidated entities. Intercompany accounts and transactions are eliminated upon consolidation. Disposals are reflected at the time risks and rewards of ownership have been transferred.         The principal subsidiaries included in the accompanying consolidated financial statements and CTC Media, Inc.'s ownership interests in these subsidiaries at December 31, 2008, 2009 and 2010 are presented in the table below: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 20%; WIDTH: 60%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left" width="10"></td> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="32"></td> <td style="FONT-FAMILY: times" width="18"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="32"></td> <td style="FONT-FAMILY: times" width="18"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="32"></td> <td style="FONT-FAMILY: times" width="12"></td></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left" colspan="2">  </th> <th style="FONT-FAMILY: times"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="2">2008 </th> <th style="FONT-FAMILY: times"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="2">2009 </th> <th style="FONT-FAMILY: times"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="2">2010 </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Networks</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> CTC Network</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> Domashny Network</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> DTV Network</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Television Station Groups</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> CTC-Moscow</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> CTC-St. Petersburg</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">80.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">80.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">80.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> Domashny-Moscow</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">99.9</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">99.9</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> Domashny-St. Petersburg</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> DTV-St. Petersburg</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> CIS Group</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> Channel 31 Group</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">60.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">60.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">60.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> Production Group</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> Costafilm</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" valign="bottom"> Soho Media</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">100.0</td> <td style="FONT-FAMILY: times" valign="bottom">%</td></tr></table></div> </div>         The Company is the primary beneficiary of the Channel 31 Group (acquired in 2008), a variable interest entity consisting of a 20% participation interest in Teleradiokompaniya 31st Kanal LLP ("Channel 31"), and a 60% and 70% interest in Prim LLP and Advertising and Marketing LLP, respectively, which provide programming content and the advertising sales function to Channel 31 (together, the "Channel 31 Group"). These interests provide the Company with a right to 60% of the economic interest of the Channel 31 Group (see Note 15 for a discussion about legal restrictions of ownership in Kazakhstan). The Company has consolidated the Channel 31 Group from its date of acquisition. At December 31, 2010, the Channel 31 Group had assets (excluding intercompany assets) totaling $21,809 and liabilities (excluding intercompany liabilities) totaling $14,087. These assets and liabilities primarily relate to broadcasting licenses, and the related deferred tax liabilities and tax contingencies assumed at acquisition of the Channel 31 Group (Note 4). The Company finances the Channel 31 Group's operations during the ordinary course of business. At December 31, 2010 the amount of intercompany payables of the Channel 31 Group totaled $5,296. Channel 31 Group's net income attributable to CTC Media, Inc. stockholders totaled $2,212 for 2010. This amount includes intercompany expenses of $767. Business Segments         The Company operates in eight business segmentsCTC Network, Domashny Network, DTV Network, CTC Television Station Group, Domashny Television Station Group, DTV Television Station Group, CIS Group and Production Group. The Company evaluates performance based on the operating results of each segment, among other performance measures (Note 16). Use of Estimates         The preparation of financial statements in conformity with the accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in the financial statements include, among others, the estimate of fair values in business combinations, estimates of the fair value of the Company's common stock in determining stock-based compensation, the amortization method and periods for programming rights and sublicensing rights, useful lives of tangible and intangible assets, impairment of goodwill, valuation of indefinite-lived intangible assets and long-lived assets, estimates of contingencies, and the determination of valuation allowances for deferred tax assets. Consequently, actual results may differ from those estimates. Foreign Currency Translation         In 2008, 2009 and 2010, the functional currency of the Company's subsidiaries domiciled in Russia was the Russian ruble, and the functional currency of the Channel 31 Group was the Kazakh tenge. The Company's reporting currency is the US dollar. Translation of financial statements into US dollars has been performed in accordance with the accounting provisions using the current rate method. As such, assets and liabilities were translated at the rates of exchange prevailing at the balance sheet dates; stockholders' equity was translated at the applicable historical rates; and revenue and expenses were translated at monthly average rates of exchange. Translation gains and losses were included as part of accumulated other comprehensive income (loss). Revenue Recognition         The Company recognizes advertising revenues in the period that the corresponding advertising spots are aired. Advertising revenue was recorded net of Value Added Taxes ("VAT") and accrued sales commissions payable to Video International. The advertising sales commissions amounted to $95,346, $72,036 and $84,454 in 2008, 2009 and 2010, respectively.         Sublicensing, own production and other revenue primarily represent revenue the Company earns from sublicensing its rights to programming and from licensing of internally-produced programming. Sublicensing and own production revenue is recognized at such time as there is persuasive evidence that a sale or arrangement with a customer exists, the underlying programming is complete and has been transferred to the customer, the licensing period has commenced and the customer can begin exploitation, the arrangement fee is fixed or determinable, and collection of the arrangement fee is reasonably assured.         Payments received in advance for advertising and other revenue are recorded as deferred revenue until earned. Programming Rights         Programming rights are stated at the lower of cost or net realizable value. In accordance with accounting guidance, the Company capitalizes expenditures for the acquisition of programming rights.         Purchased programming rights and the related liabilities are recorded at their gross value when the license period begins and the programs are available for broadcast. Marketing, distribution, and general and administrative costs are expensed as incurred.         Programming rights also include internally-produced programming. The cost of such programming includes expenses related to the acquisition of format rights, direct costs associated with production and capitalized overheads. The Company capitalizes production costs, including costs of individuals or departments with exclusive or significant responsibility for the production of programming that can be allocated to such particular programming, as a component of film costs. Internally-produced programming is stated at the lower of amortized cost or fair value.         The Company amortizes programming based on expected revenue generation patterns, based on the proportion that current estimated revenues bear to the estimated remaining total lifetime revenues. These estimates are periodically reviewed and adjustments, if any, will result in changes to programming amortization rates or possibly the recognition of an impairment charge to the consolidated statement of income (loss). Such write-downs establish a new cost basis for programming rights. Purchased program rights are classified as current or non-current assets based on anticipated usage. Internally-produced programming is classified as non-current. Sublicensing Rights         Sublicensing rights include the unamortized cost of completed television episodes, television series in production and programming rights acquired for sublicensing rather than for exhibition on the Company's own Networks. Sublicensing rights principally consist of production costs, and development and format costs, and are stated at the lower of cost, less accumulated amortization, or fair value. The amount of capitalized sublicensing rights recognized as cost for a given episode as it is exhibited in various markets, throughout its life cycle, is determined using the film forecast method. Under this method, the amount of capitalized costs recognized as expense is based on the proportion of the television episode's revenues recognized for such period to the television episode's estimated remaining ultimate revenues. These estimates are revised periodically and projected losses, if any, are provided in full. Property and Equipment         Property and equipment are stated at historical acquisition cost less accumulated depreciation. Depreciation is provided utilizing the straight-line method over the estimated useful lives of the assets, which range from 3 to 25 years. Leasehold improvements are amortized over the shorter of their estimated useful life or the initial operating lease. Maintenance and repair costs are expensed as incurred, while upgrades and improvements are capitalized.         At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recorded in the consolidated statement of income (loss). Amortizable Long-Lived Assets         Definite-lived intangible assets primarily represent cable network connections and network affiliation agreements. Cable network connections are amortized on a straight-line basis over their estimated term, from the date of such connection until December 2015. While the Company uses 2015 as the estimated useful life of existing connections, future changes in the digital conversion timeline, which may occur, would cause the Company to reassess this estimate. Network affiliation agreements are amortized on a straight-line basis over their estimated term, which is five years. These assets are stated at cost less accumulated amortization.         Amortizable assets, including property and equipment and definite-lived intangibles, are reviewed periodically to determine whether an event or change in circumstances indicates that the carrying amount of the asset may not be recoverable. For long-lived assets to be held and used, the Company bases its evaluation on such impairment indicators as the nature of the assets, the future economic benefit of the assets and any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable, the Company determines whether impairment has occurred through the use of an undiscounted cash flows analysis of assets at the lowest level for which identifiable cash flows exist. If the carrying value of the asset or group of assets exceeds the undiscounted cash flows, impairment is deemed to have occurred, and the Company recognizes an impairment loss for the difference between the carrying amount and the estimated fair value of the asset. The fair value of the asset is estimated using a discounted cash flow analysis or other valuation techniques. Fair Value Measurements         The Company has adopted changes issued by the FASB to the use of fair value accounting. The new standard defines fair value, establishes a framework for measuring fair value and expands disclosure requirements about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prescribed by the standard contains three levels as follows: <ul> <li style="list-style: none"> Level 1Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: (1) quoted prices for similar assets or liabilities in active markets; (2) quoted prices for identical or similar assets in non-active markets; (3) inputs other than quoted prices that are observable for the asset or liability; and (4) inputs that are derived principally from or corroborated by other observable market data. Level 3Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions. </li></ul>         In 2010, the Company had recurring measurements at fair value for financial derivative instruments, and non-recurring measurements at fair value for its broadcasting licenses, trade names, nonfinancial assets, and liabilities recognized as a result of acquisitions or as a part of annual impairment tests for broadcasting licenses and tradenames, which were all Level 3 measurements. There were no transfers between categories during the periods presented. See below. Goodwill and Indefinite-Lived Intangible Assets         Goodwill represents the excess of acquisition costs over the Company's share of fair value of the net assets of acquired businesses. Indefinite-lived intangible assets primarily represent broadcasting licenses and trade names.         The Channel 31 broadcasting license was granted for an indefinite period of time. Russian broadcasting licenses generally require renewal every five years and are renewed upon application. The Company expects each of its licenses to be renewed. Broadcasting licenses are assigned indefinite lives after consideration of the following conditions: <ul> <li style="list-style: none"> <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">the Company intends to renew the licenses into the foreseeable future; </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">the Company has precedents of renewals or reasonable expectation of renewals; </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">the Company does not expect any substantial cost to be incurred as part of a future license renewal and de minimis costs have been incurred in the renewals to date; and </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">the Company has not experienced any historical evidence of a compelling challenge to its holding of licenses.</dd></dl></li></ul>         The Company believes that the history of renewals, the consistency in the regulatory environment of the TV broadcasting industry and apparent stability in the Russian and Kazakh political environments provide sufficient basis for indefinite-life assumptions for its licenses, as it reflects the foreseeable future period during which the Company expects to benefit from the use of such licenses. As of December 31, 2010, the weighted-average period prior to the next renewal of Russian broadcasting licenses is 2.4 years. During 2010, the Company renewed Russian broadcasting licenses with carrying value totaling $25,128 through 2015. Also during 2010, the Company assigned $21,857 of the purchase consideration paid in conjunction with the acquisition of several regional stations to broadcasting licenses (Note 4). The weighted-average period prior to the next renewal of these new licenses is 2.0 years.         Indefinite-lived intangible assets and goodwill are not subject to amortization but are tested for impairment. <ul> <li style="list-style: none"> Goodwill and Indefinite-Lived Intangible Assets Impairment Tests </li></ul>         Goodwill and indefinite-lived intangible assets are reviewed for impairment annually, in the fourth quarter, or between annual tests if events or changes in circumstances indicate that an asset might be impaired. Outside the annual review, there are a number of factors which could trigger an impairment review and these could include: <ul> <li style="list-style: none"> <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">under-performance of operating segments or changes in projected results; </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">changes in the manner of utilization of an asset; </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">severe and sustained declines in the traded price of the Company's common stock that are not attributable to factors other than the underlying value of its assets; </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">negative market conditions or economic trends; and </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">specific events, such as new legislation, new market entrants, changes in technology or adverse legal judgments that the Company believes could have a negative impact on its business. </dd></dl></li></ul>         The Company determines whether an impairment of goodwill has occurred by assigning goodwill to the reporting units and comparing the carrying amount of the entire reporting unit to the estimated fair value based on discounted cash flows of the reporting unit (Step 1). If the carrying value of the reporting unit is more than the estimated fair value of the reporting unit, the Company compares the implied fair value of goodwill based on a hypothetical purchase price allocation to the carrying value of the goodwill (Step 2). If the carrying value of goodwill exceeds the implied fair value of goodwill based on Step 2, goodwill impairment is deemed to have occurred, and the Company recognizes a loss for the difference between the carrying amount and the implied fair value of goodwill. Prior to testing goodwill for impairment, the Company compares fair values of indefinite-lived intangible assets with their carrying values to determine whether the assets might be impaired. The Company has determined that its reporting units are the same as its operating segments.         Indefinite-lived intangible assets are evaluated for impairment by comparing the fair value of the asset to its carrying value. Any excess of the carrying value over the fair value is recognized as an impairment charge. Broadcasting licenses and tradenames are evaluated at the individual asset level.         Assessing goodwill and indefinite-lived intangible assets for impairment is a process that requires significant judgment and involves detailed quantitative and qualitative business-specific analysis and many individual assumptions which fluctuate with the passage of time.         The Company's estimate of the cash flows its operations will generate in future periods forms the basis for most of the significant assumptions inherent in the impairment reviews. The Company's expectations of these cash flows are developed during its long- and short-range business planning processes, which are designed to address the uncertainties inherent in the forecasting process by capturing a range of possible views about key trends which govern future cash flow growth.         The Company has observed over many years a strong positive correlation between the macroeconomic performance of its markets and the size of the television advertising market and ultimately the cash flows the Company generates. With this in mind, the Company has placed a high importance on developing its expectations for the future development of the macroeconomic environment in general and the advertising market and the Company's share of it in particular. While this has involved an appreciation of historical trends, the Company has placed a higher emphasis on forecasting these market trends, which has involved detailed review of macroeconomic data and a range of both proprietary and publicly-available estimates for future market development.         The Company determines the fair values calculated in impairment tests using free cash flow models involving assumptions that are based upon what the Company believes a hypothetical marketplace participant would use in estimating fair value on the measurement date. In valuing broadcasting licenses, the Company allocates cash flows that the licenses generate both from national and regional advertising using the "direct value" method. The most significant of the assumptions used in its valuations are discussed below: <ul> <li style="list-style: none"> <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">Cost of capital: The cost of capital reflects the return a hypothetical market participant would require for a long-term investment in an asset and can be viewed as a proxy for the risk of that asset. The Company calculates the cost of capital according to the Capital Asset Pricing Model using a number of assumptions, the most significant of which is a Country Risk Premium ("CRP"). The CRP reflects the excess risk to an investor of investing in markets other than the United States and generally fluctuates with expectations of changes in a country's macroeconomic environment. The costs of capital that the Company applied in all reporting units in 2008 was high compared to historical levels, which the Company believed represented a fundamental re-pricing of the perceived risk of investing in Russia and CIS during those periods. In 2009 and 2010, as overall economic conditions improved and as the Russian and CIS markets recovered, the cost of capital also declined. However, if the Russian macroeconomic environment becomes less stable and the risk to investors investing in Russian markets increases, the cost of capital may increase, which in turn will decrease the fair value of the respective assets or reporting units. Additionally, changes in the financial markets, such as an increase in interest rates or an increase in the expected required return on equity by market participants within the industry, could increase the discount rate, thus decreasing the fair value of assets. The cost of capital used by the Company in its 2009 and 2010 analysis ranged from 15.5% to 20% in 2009 and from 13.5% to 18.4% in 2010, based on the level of risk related to each particular asset or reporting unit. </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">Growth rate into perpetuity: Growth rate into perpetuity reflects the level of economic growth in each of the Company's markets from the last forecasted period into perpetuity and is the sum of an estimated real growth rate, which reflects the long-term expectations for inflation. These assumptions are inherently uncertain. The growth rate into perpetuity used by the Company in its 2008, 2009 and 2010 analysis was 4%. In its calculations, the perpetuity period starts after nine years. The Company's estimates of these rates are based on observable market data. </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">Total advertising market: The size of the television advertising market effectively places an upper limit on the advertising revenue the Company can expect to earn. The Company's estimate of the total advertising market is developed from a number of external sources, in combination with a process of on-going consultation with operational management. In general, expenditures by advertisers tend to reflect overall economic conditions and buying patterns. Economic conditions in Russia and other CIS countries where the Company operates appear to be improving and the valuation model used by the Company assumes recovery from the downturn in the economy, which started in the middle of 2008, by 2012. If, however, such improvements are not sustainable or if the economic instability resumes, the size of the television advertising market may decrease which, in turn, may adversely affect the fair value of the respective assets or reporting units. </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">Allocation of cash flows from national advertising to broadcasting licenses: Regional stations broadcast programming received by satellite from the Networks, including national advertising. Therefore, the Company's regional broadcasting licenses generate revenues for the Company at the Networks level. Russian television viewing data, including ratings, audience shares and related metrics, are currently gathered by TNS Russia. The TNS measurement system uses internationally recognized methods and is the standard currently used by all major television broadcasters, advertisers and advertising agencies in Russia. The audience rating for any channel is measured based on the ratings in cities included in a panel measured by TNS. The Company's assumptions on the share of national revenue generated by each of its broadcasting licenses are developed from a number of external sources, in combination with a process of on-going consultation with operational management. If the system of audience measurement were to change or the weighting of the panel of cities were to change in a manner that increased the weight in areas where the Company does not have coverage, it could impact the fair value of our reporting units and broadcasting licenses by lowering the Company's ratings. </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">Market shares: This assumption is a function of the audience share the Company expects to generate from its reporting units, and the relative price at which the Company can sell advertising. For broadcasting licenses, the Company estimates market shares based on assumptions related to the market participants potentially willing to acquire the station in each particular region. The Company's estimates of the market shares are developed from a number of external sources, in combination with a process of on-going consultation with operational management. If the Company's audience shares or ratings, or shares or ratings of market participants, were to fall as a result, for example, of competitive pressures, the underperformance of key programs, the failure to renew licenses, or a change in the method of measuring television audiences, this would likely result in a decrease in fair value of the respective reporting units/broadcasting licenses. </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">Forecasted operating costs: The level of cash flow generated by each operation is ultimately governed by the extent to which the Company manages the relationship between revenues and costs. The Company forecasts the level of operating costs by reference to (a) the historical absolute and relative levels of costs the Company has incurred in generating revenue in each reporting unit and regional station, (b) the operating strategy of each business, (c) specific forecasted operating costs to be incurred and (d) expectations as to what these costs would be for an average market participant. The Company's estimates of forecasted operating costs are developed from a number of external sources, in combination with a process of on-going consultation with operational management. These forecasts could vary from the Company's projections. </dd></dl></li></ul> <ul> <li style="list-style: none"> <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">Forecasted capital expenditure: The size and phasing of capital expenditure, both recurring expenditure to replace retired assets and investments in new projects, has a significant impact on cash flows. The Company forecasts the level of future capital expenditure based on current strategies and specific forecast costs to be incurred, as well as expectations on what these costs would be like for an average market participant. The Company's estimate of forecasted capital expenditure is developed from a number of external sources, in combination with a process of on-going consultation with operational management. These forecasts could vary from the Company's projections. </dd></dl></li></ul>         The Company believes that the values assigned to key assumptions and estimates described above represent the most realistic assessment of future trends. In order to check the reasonableness of the fair values implied by cash flow estimates the Company also calculates the value of its common stock implied by its cash flow forecasts and compares this to actual traded values. <ul> <li style="list-style: none"> Impairment reviews during 2008, 2009 and 2010 </li></ul>         As of December 31, 2008, the Company recorded non-cash impairment losses totaling $232,683 related to intangible assets and goodwill recorded in connection with acquisitions completed in 2008. Of the total impairment losses, $87,889 related to the impairment of broadcasting licenses of DTV Television Station Group, $7,743 related to impairment of the trade name of DTV Network, $74,699 and $58,189 related to impairment of the broadcasting license and goodwill, respectively, of Channel 31 Group and $4,163 related to the impairment of the broadcasting license of its Moldova broadcasting group.         The principal factors leading to the impairment losses recorded by the Company in 2008 were reductions in the projected future cash flows of the recently acquired businesses, as well as increases in the discount rates applied to those cash flows. These modifications were made to reflect the prevailing economic instability in Russia and other CIS countries in which the Company operates and the expectation that this economic environment could continue in the near to mid-term, in light of the global credit crisis and the related turmoil in the global financial system. Although the Company continued to project future long-term growth in cash flows, such growth was lower than that estimated at the time the businesses were acquired. The reduction in estimated future cash flows from February 2008, when the Company acquired Channel 31 Group, and from April 2008, when the Company acquired DTV Group, reflected the impact of the weaker economy, including forecasted decline in gross domestic product and a forecasted decline in the growth of total advertising spending in ruble terms in 2009, offset in part by increased cost controls of the Company and decreased statutory income tax rates in Russia and Kazakhstan effective from 2009. The Company used higher discount rates (ranging from approximately 22%-26% for 2009 to 13%-17% for 2013 and terminal years as compared to approximately 12-16% used in the original February 2008 valuation of Channel 31 Group, the April 2008 valuation of DTV Network and DTV Television Station Group and the October 2008 valuation of the Moldova Group reporting unit and its assets). These increased rates reflected an expected increase in the risks inherent in the estimated future cash flows attributable to the economic volatility, which was more pronounced during the fourth quarter of 2008.         As of December 31, 2009, the Company recorded non-cash impairment losses totaling $18,739 related to certain broadcasting licenses in the CTC and Domashny Television Station Groups. The decline in the fair value of these broadcasting licenses below book value was primarily the result of the change in the weight given to panel cities by TNS Russia. Certain cities in which the Company holds licenses were given less weight than in the previous panel survey, reducing the value of these licenses.         In the fourth quarter of 2010, the Company performed its annual impairment review, which did not result in any further impairment charges.         The DTV Network reporting unit and DTV umbrella broadcasting license were the most sensitive to changes in the assumptions described above. In the 2010 impairment review, the Company concluded that the fair value of the reporting unit had increased marginally, resulting in a higher excess of fair value over carrying value. The main reasons for the increase in the fair value of the reporting unit were a reduction in the cost of capital applied to reflect a slightly lower perceived risk among investors of investing in Russia, an upward revision to the advertising market as a result of a more positive outlook for the market and the pace and timing of the recovery of the market, and more encouraging overall macro-economic conditions in Russia in 2010 compared to 2009 and 2008. In addition to the factors noted above, the average price of the Company's common stock in 2010 was higher when compared to 2009 and 2008. As of December 31, 2010, the DTV Network reporting unit had $135,397 of goodwill, and $56,668 attributed to the broadcasting umbrella license; their fair values exceeded the carrying values by approximately 33% and 24%, respectively, as of the impairment testing date.         In order to evaluate the sensitivity of the fair value calculations on its impairment analysis, the Company applied a hypothetical 10% decrease to the calculated fair values. In respect of reporting units, a hypothetical 10% decrease in the fair value of each reporting unit would not have resulted in a failure of step one of the goodwill impairment test.         Other than with respect to the several broadcasting licenses identified below, a hypothetical 10% decrease in the fair value of each indefinite lived asset would not have resulted in additional impairment.         For certain broadcasting licenses in the CTC and DTV Television Station Groups, a hypothetical 10% decrease in the fair value of these assets as of the date of the impairment test for 2010 would have resulted in additional impairment. As of December 31, 2010, the carrying value of these broadcasting licenses was as follows: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 20%; WIDTH: 60%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="112"></td> <td style="FONT-FAMILY: times" width="12"></td></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">  </th> <th style="FONT-FAMILY: times"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="2">Carrying amount, as of December 31, 2010</th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Broadcasting licenses</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom"> CTC Television Station Group:</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Kazan</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">9,296</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom"> Saratov</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">7,871</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Stavropol</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">2,907</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom"> Arkhangelsk (1)</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">4,175</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Perm (1)</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">6,386</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom"> Achinsk (1)</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">1,605</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> DTV Television Station Group:</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom"> St. Petersburg (1)</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">9,954</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Tula</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">4,421</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom"> Total</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">46,615</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr></table></div> </div> <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 20%; PADDING-TOP: 0pt; POSITION: relative; TEXT-ALIGN: left"> <hr style="COLOR: #000000" align="left" width="26%" noshade="noshade" size="1" /> <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times">(1)</dt> <dd style="FONT-FAMILY: times">The fair value of these broadcasting licenses approximated their carrying value in light of their recent acquisition by the Company. The Company has performed preliminary purchase price allocations for these acquisitions using the best information available as of the date of these financial statements. See Note 4. </dd></dl></div>         Although management considered all current information when calculating impairment charges, any future changes in events or circumstances, such as changes in the economy, the planned transition to digital broadcasting, decreases in audience shares or ratings, increased competition from cable providers, or changes in the audience measurement system, could result in decreases in the fair value of the Company's intangible assets and it is probable that the Company will have to recognize additional impairment charges in future periods as described above. Prepayments         Prepayments primarily represent payments to producers of programming prior to the commencement of the license period for programming rights. At December 31, 2009 and 2010, prepayments for programming rights were $33,800 and $33,108, respectively. Cash and Cash Equivalents and Short-Term Investments         The Company classifies cash on hand and deposits in banks and any other investments with an original maturity of three months or less as cash and cash equivalents. Deposits in banks with an original maturity ranging from 91 to 365 days are classified as short-term investments.         Of the $59,565 cash balance the Company had as of December 31, 2010, it held cash and deposits with a maturity of 90 days and less with a US dollar-equivalent value of $57,452 in Russian banks, including subsidiaries of foreign banks. In addition, the Company has deposits with a maturity of more than 90 days in the amount of $117,457 in Russian banks. This amount of deposits includes ruble-denominated deposits of $79,879 bearing interest ranging from 3.7% to 6.5%, and US dollar-denominated deposits of $37,578 bearing interest ranging from 1.9% to 3.0%. Management periodically reviews the credit worthiness of the banks in which it holds its cash. Accounts Receivable and Allowance for Doubtful Accounts         Accounts receivable are shown at their net realizable value which approximates their fair value.         The Company establishes an allowance for doubtful accounts receivable based on specific identification and management estimates of recoverability, including discussions with Video International, as appropriate. In cases where the Company is aware of circumstances which may impair a receivable, the Company records a specific allowance against amounts due, and thereby reduces the net recognized receivable to the amount the Company believes will be collected. If all collection efforts have been exhausted, the receivable is written off against the allowance. The Company's credit policy does not require to enter into any netting agreements or collateral from customers.         The following table summarizes the changes in the allowance for doubtful accounts for the year ended December 31, 2010: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 20%; WIDTH: 60%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="39"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="39"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="34"></td> <td style="FONT-FAMILY: times" width="12"></td></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">  </th> <th style="FONT-FAMILY: times"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="2">2008 </th> <th style="FONT-FAMILY: times"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="2">2009 </th> <th style="FONT-FAMILY: times"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="2">2010 </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Balance at January 1</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">435</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">1,355</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">988</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom"> Additions (charged to expenses)</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">970</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">420</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">53</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Acquired</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">142</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"></td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"></td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom"> Deductions (subsequent payments or write-offs)</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"></td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">(778</td> <td style="FONT-FAMILY: times" valign="bottom">)</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">(173</td> <td style="FONT-FAMILY: times" valign="bottom">)</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Foreign currency translation adjustments</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">(192</td> <td style="FONT-FAMILY: times" valign="bottom">)</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">(9</td> <td style="FONT-FAMILY: times" valign="bottom">)</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">(88</td> <td style="FONT-FAMILY: times" valign="bottom">)</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom"> Balance at December 31</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">1,355</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">988</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">780</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr></table></div> </div> Income Taxes         The Company recognizes income tax positions if it is more likely than not that they will be sustained on a tax audit, including resolution of related appeals or litigation processes, if any, and measures them as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company uses the liability method of accounting for income taxes. Deferred income taxes result from temporary differences between the tax bases of assets and liabilities and the bases as reported in the consolidated financial statements, as well as the tax benefits of net operating loss carryforwards which are expected to be realized. A valuation allowance for deferred tax assets is established when it is more likely than not that all or a portion of deferred tax assets will not be realized (Note 12). Advertising Costs         Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2008, 2009 and 2010 were $16,459, $11,140 and $15,265, respectively. Pensions         The Company contributes to local state pension and social funds on behalf of all its employees in Russia. Starting from 2010 Unified Social Tax (UST), which provided application of a regressive rate from 26% to 2% of the annual gross remuneration of each employee, has been replaced with contributions to social, medical and pension funds at a flat rate of 26% of the annual gross remuneration of each employee not to exceed certain pre-determined amount of compensation. Starting from 2011, the rate will increase to 34% for most of the taxpayers. Taxpayers involved in the mass media industry may enjoy a tax benefit, provided they meet certain conditions, and use the following tax rates: 26% with respect to the 2011 tax year, 27%-2012, 28%-2013, 30%-2014. Starting with 2015, tax payers involved in the mass media industry will be taxed at common rate of 34%.         In Kazakhstan, employers are required to withhold 10% of the gross salaries of local employees for remittance to local state pension funds. In addition, employers are required to pay social tax for their employees calculated by the application of a flat rate of 11% of the annual gross remuneration of each employee and obligatory social insurance contributions of 5% of the gross salaries of local employees. These contributions are expensed as incurred. Financial instruments and hedging activities         The Company measures derivatives at fair value and recognizes them as either assets or liabilities on the balance sheet. The Company designates derivatives as either fair value hedges or cash flow hedges when the required criteria are met. Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the consolidated statement of income (loss) together with any changes in the fair value of the hedged asset or liability that is attributed to the hedged risk. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in equity. The gain or loss relating to the ineffective portion is recognized immediately in the consolidated statement of income (loss). For derivatives that do not meet the conditions for hedge accounting, gains and losses from changes in the fair value are included in the consolidated statement of income (loss). The Company does not use derivatives for trading purposes. At December 31, 2009 and 2010, the Company did not have any fair value or cash flow derivatives designated as hedges. Fair Value of Financial Instruments         The carrying amounts of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, accrued liabilities and debt approximate their fair value.         From time to time, the Company enters into foreign exchange hedging arrangements in relation to a portion of its programming commitments denominated in US dollars. These contracts are recorded at fair value at the balance sheet date, and the resulting unrealized gains and losses are recorded in the consolidated statement of income (loss), together with realized gains and losses arising on settlement of these contracts. Comprehensive Income (Loss)         During the years ended December 31, 2008, 2009 and 2010, comprehensive income (loss) comprises net income (loss) and foreign currency translation adjustments. Stock-Based Compensation         The cost of equity instruments is measured based on the fair value of the instruments on the date they are granted and is required to be recognized over the period during which the employees are required to provide services in exchange for the equity instruments.         The Company estimates the fair value of stock options at the date of grant using a Black-Scholes option pricing model. The Black-Scholes pricing model was originally developed for use in estimating the fair value of traded options, which have different characteristics than the Company's employee stock options. The model is also sensitive to changes in the subjective assumptions, which can materially affect the fair value estimate (Note 13). Once the Company has estimated the fair value of the equity instruments, it recognizes this estimated cost as stock-based compensation expense over the service period. Comparative Figures         Reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation. These changes reclassify certain expenses in direct operating and selling, general and administrative expenses, but do not impact total operating expenses. Also, in 2010, the Company finalized its purchase price allocation for stations acquired in December 2009, and, as a result, has made a reclassification in the opening balance in the amount of $6,926 and $1,643 from intangible assets to goodwill and deferred tax liabilities, respectively. New and Recently Adopted Accounting Pronouncements         Fair Value Measurements and Disclosures.    The Company's nonfinancial assets and liabilities measured at fair value on a nonrecurring basis include goodwill and intangible assets acquired in connection with business combinations. The Company adopted the fair value measurement guidance as it relates to these assets and liabilities as of January 1, 2009. The adoption of this guidance did not have a significant impact on the Company's financial statements.         In January 2010, the FASB issued additional guidance that requires new disclosures related to transfers into and out of Levels 1 and 2 of the fair value hierarchy (discussed above) and separate disclosures related to purchases, sales, issuances and settlements in the roll forward for Level 3 inputs. The update also clarifies existing guidance for fair value measurements for each class of assets and liabilities as well as for disclosures about inputs and valuation techniques. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures related to purchases, sales, issuances and settlements in the roll forward for Level 3 inputs which are effective for interim and annual reporting periods beginning after December 15, 2010. The adoption of this update will not have a significant impact on the Company's financial statements.         Subsequent Events.    In May 2009, the FASB issued guidance on subsequent events which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This guidance is based on the same principles as currently exist in auditing standards and was issued by the FASB to include accounting guidance that originated as auditing standards into the body of authoritative literature issued by the FASB. The standard addresses the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The guidance is effective for financial statements issued for fiscal years and interim periods ending after June 15, 2009. The adoption of this guidance did not have a significant impact on the Company's financial statements.         Consolidation of variable interest entities.    In June 2009, the FASB issued guidance that amends the consolidation guidance that applies to variable interest entities ("VIEs"). The amendments significantly affects the overall consolidation analysis under the existing guidance. Accordingly, an enterprise needs to reconsider its previous conclusions, including (1) whether an entity is a VIE, (2) whether the enterprise is the VIE's primary beneficiary, and (3) what type of financial statement disclosures are required. The guidance is effective for the Company as of January 1, 2010. Early adoption is prohibited. The adoption of this guidance did not have animpact on the Company's financial statements.         Stock-based compensation.    In April 2010, the FASB issued an amendment to its stock-based compensation guidance to clarify that employee stock options that have exercise prices denominated in the currency of any market in which a substantial portion of the entity's securities trade should be classified as equity, assuming all other criteria for equity classification are met. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. Early adoption is permitted. The Company does not expect the provisions of the amendment to have any effect on its financial statements.         Business Combinations.    In December 2007, FASB issued new guidance on business combinations. This guidance establishes principles and requirements for how the Company: (1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (2) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (3) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The business combinations guidance also requires acquisition-related transaction and restructuring costs to be expensed rather than treated as part of the cost of the acquisition. This guidance applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company adopted the business combination guidance on January 1, 2009.         In December 2010, the FASB issued guidance on disclosure of supplementary pro forma information for business combinations which states that when a public entity's business combinations are material on an individual or aggregate basis, the notes to its financial statements must provide pro forma revenue and earnings of the combined entity as if the acquisition date(s) had occurred as of the beginning of the annual reporting period. It clarifies that if comparative financial statements are presented, the pro forma disclosures for both periods presented (the year in which the acquisition occurred and the prior year) should be reported as if the acquisition had occurred as of the beginning of the comparable prior annual reporting period only and not as of it had occurred at the beginning of the current annual reporting period. It is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 15 December 2010, and should be applied prospectively.         Intangible Assets.    In December 2010, the FASB issued additional guidance which does not prescribe a specific method of calculating the fair value of a reporting unit in the performance of step 1 of the goodwill impairment test and requires entities with a zero or negative carrying value to assess, considering qualitative factors, whether it is more likely than not that a goodwill impairment exists. If an entity concludes that it is more likely than not that goodwill impairment exists, the entity must perform step 2 of the goodwill impairment test. It is effective for the impairment tests performed during entities' fiscal years (and interim periods within those years) that begin after December 15, 2010. Early application will not be permitted. The Company does not expect the provisions of the amendment to have significant impact on its financial statements. </td></tr></table>   2.     BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles offalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringNo definition available.No authoritative reference available.falsefalseBASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES12BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESUnKnownUnKnownUnKnownUnKnownfalsetrue