XML 29 R7.htm IDEA: XBRL DOCUMENT v2.3.0.15
Summary Of Significant Accounting Policies
3 Months Ended
Sep. 30, 2011
Summary Of Significant Accounting Policies [Abstract] 
Summary Of Significant Accounting Policies

 

2.             Summary of Significant Accounting Policies

 

Revenue Recognition

 

We generate revenue from the sale of products and services. We commence revenue recognition when all of the following conditions are met:

 

·         persuasive evidence of an arrangement exists,

·         the system has been shipped or the services have been performed,

·         the fee is fixed or determinable, and

·         collectibility of the fee is probable.

 

Our standard multiple-element contractual arrangements with our customers generally include the delivery of systems with multiple components of hardware and software, certain professional services that typically involve installation and consulting, and ongoing software and hardware maintenance. Product revenue is generally recognized when the product is delivered. Professional services that are of a consultative nature may take place prior to, or after, delivery of the system, and installation services typically occur within 90 days after delivery of the system. Professional services revenue is typically recognized as the service is performed. Initial maintenance begins after delivery of the system and typically is provided for one to two years after delivery. Maintenance revenue is recognized ratably over the maintenance period. Our product sales are predominantly system sales whereby software and equipment function together to deliver the essential functionality of the combined product. Upon our adoption of ASU 2009-14 on July 1, 2010, sales of these systems were determined to typically be outside of the scope of the software revenue guidance in Topic 985 (previously included in SOP 97-2) and are accounted for under ASU 2009-13.

 

Our sales model for media data and advertising solutions ("MDAS") products includes the option for customers to purchase: (1) a perpetual license with maintenance; (2) a term license with maintenance and managed services; or (3) software as a service. We expect that revenue from these sales generally will be recognized over the term of the various customer contracts. Professional services attributable to implementation of our media data and advertising products or managed services are essential to the customers' use of these products and services. We defer commencement of revenue recognition for the entire arrangement until we have delivered the essential professional services or have made a determination that the remaining professional services are no longer essential to the customer. We recognize revenue for managed services and software as a service arrangements once we commence providing the managed or software services and recognize the service revenue ratably over the term of the various customer contracts. In circumstances whereby we sell a term license and managed services, we commence revenue recognition after both the software and service are made available to the customer and recognize the revenue from the entire arrangement ratably over the longer of the term license or managed service period.

 

We evaluate each element in a multiple-element arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable and within our control. Our various systems have standalone value because we have either routinely sold them on a standalone basis or we believe that our customers could resell the delivered system on a standalone basis. Professional services have standalone value because we have routinely sold them on a standalone basis and there are similar third party vendors that routinely provide similar professional services. Our maintenance has standalone value because we have routinely sold maintenance separately.

 

As a result of the adoption of ASU 2009-13, we allocate revenue to each element in an arrangement based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence ("VSOE"), if available, third party evidence ("TPE"), if VSOE is not available, or estimated selling price ("ESP"), if neither VSOE nor TPE is available. We have typically been able to establish VSOE of fair value for our maintenance and services. We determine VSOE of fair value for professional services and maintenance by examining the population of selling prices for the same or similar services when sold separately, and determining that the pricing population for each VSOE classification is within a very narrow range of the median selling price. For each element, we evaluate at least annually whether or not we have maintained VSOE of fair value based on our review of the actual selling price of each element over the previous 12 month period.

 

            Our product deliverables are typically complete systems comprised of numerous hardware and software components that operate together to provide essential functionality, and we are typically unable to establish VSOE or TPE of fair value for our products.  Due to the custom nature of our products, we must determine ESP at the individual component level whereby our estimated selling price for the total system is determined based on the sum of the individual components.  ESP for components of our real-time products is typically based upon list price, which is representative of our actual selling price.  ESP for components of our video products are based upon our most frequent selling price ("mode") of standalone and bundled sales, based upon a 12 month historical analysis.  If a mode selling price is not available, then ESP will be the median selling price of all such component sales based upon a twelve month historical analysis, unless facts and circumstances indicate that another selling price, other than the mode or median selling price, is more representative of our estimated selling price.  Our methodology for determining estimated selling price requires judgment, and any changes to pricing practices, the costs incurred to manufacture products, the nature of our relationships with our customers, and market trends could cause variability in our estimated selling prices or cause us to re-evaluate our methodology for determining estimated selling price.  We will update our analysis of mode and median selling price at least annually, unless facts and circumstances indicate that more frequent analysis is required. 

 

Fair Value Measurements

 

The FASB Accounting Standards Codification ("ASC") requires certain disclosures around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

 

  • Level 1
 Quoted prices (unadjusted) in active markets for identical assets or liabilities;
  • Level 2
 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
  • Level 3
 Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates.

                 Our investment portfolio consists of money market funds, commercial paper, agency bonds, and corporate bonds. Our investment portfolio has an average maturity of three months or less and no investments within the portfolio have an original maturity of one year or more. All highly liquid investments with an original maturity of three months or less when purchased are considered to be cash equivalents. All cash equivalents are carried at cost, which approximates fair value. All investments with original maturities of more than three months are classified as short term investments. Our marketable securities are classified as available-for-sale and are reported at fair value with unrealized gains and losses, net of tax, reported in stockholders' equity as a component of accumulated other comprehensive income or loss. Interest on securities is recorded in interest income. Any realized gains or losses would be shown in the accompanying consolidated statements of operations in other income or expense. We provide fair value measurements disclosures of our available-for-sale securities in accordance with one of three levels of fair value measurement.

 

As of September 30, 2011 and June 30, 2011, we did not have an outstanding balance on our bank line of credit.

 

Our financial assets that are measured at fair value on a recurring basis as of September 30, 2011 are as follows (in thousands):

 

 

As of

  

Quoted Prices in

 

Observable

  

Unobservable

 

September 30, 2011

  

Active Markets

  

Inputs

  

Inputs

 

Fair Value

  

(Level 1)

  

(Level 2)

  

(Level 3)

               

Cash

        $ 19,660

 

      $ 19,660

 

     $   -

 

       $    -

Money market funds

4,107

 

4,107

 

-

 

-

Commercial paper

300

 

-

 

300

 

-

  Cash and cash equivalents

24,067

 

23,767

 

300

 

-

Commercial paper

1,499

 

-

 

1,499

 

-

Corporate bonds

3,101

 

-

 

3,101

 

-

Agency bonds

1,000

 

-

 

1,000

 

-

   Short-term investments

5,600

 

-

 

5,600

 

-

               
 

$ 29,667

 

$ 23,767

 

$ 5,900

 

       $    -

 

 

The following is a summary of available-for-sale securities as of September 30, 2011 (in thousands):

 

       

Unrealized

  

Unrealized

  

Estimated

   

Cost

  

Gains

  

Losses

  

Fair Value

Commercial paper

 

$ 1,799

 

      $  -

 

       $  -

 

$ 1,799

Corporate bonds

 

3,107

 

-

 

(6)

 

3,101

Agency bonds

 

1,000

 

-

 

 -

 

1,000

Total marketable securities

 

$ 5,906

 

      $  -

 

      $ (6)

 

$ 5,900

 

 

Our financial assets that are measured at fair value on a recurring basis as of June 30, 2011 are as follows (in thousands):

 

   

As of

  

Quoted Prices in

 

Observable

  

Unobservable

   

June 30, 2011

  

Active Markets

  

Inputs

  

Inputs

   

Fair Value

  

(Level 1)

  

(Level 2)

  

(Level 3)

                 

Cash

 

$ 22,991

 

$ 22,991

 

   $     -

 

        $  -

Money market funds

 

4,221

 

4,221

 

-

 

-

Commercial paper

 

300

 

-

 

300

 

-

Corporate bonds

 

302

 

-

 

302

 

-

  Cash and cash equivalents

 

27,814

 

27,212

 

602

 

-

Commercial paper

 

2,099

 

-

 

2,099

 

-

Corporate bonds

 

3,398

 

-

 

3,398

 

-

   Short-term investments

 

5,497

 

-

 

5,497

 

-

 

 

 

 

 

 

 

 

 

 

 

$ 33,311

 

$ 27,212

 

$ 6,099

 

        $  -

 

The following is a summary of available-for-sale securities as of June 30, 2011 (in thousands):

 

     

Unrealized

  

Unrealized

  

Estimated

 

Cost

  

Gains

  

Losses

  

Fair Value

               

Commercial paper

$ 2,399

 

$   -

 

       $   -

 

$ 2,399

Corporate bonds

3,702

 

     -

 

    (2)

 

3,700

 

 

 

 

 

 

 

 

Total marketable securities

$ 6,101

 

$   -

 

$  (2)

 

$ 6,099