America Online 2009 Annual Report Download - page 80

Table of Contents
Advertising Costs
The Company expenses advertising costs as they are incurred. Advertising expense to third parties was $59.3 million, $117.0 million and $301.1
million for the years ended December 31, 2009, 2008 and 2007, respectively.
Loss Contingencies
In the normal course of business, the Company is involved in legal proceedings, tax audits and other matters that give rise to potential loss
contingencies. The Company accrues a liability for such matters when it is probable that a liability has been incurred and the amount of loss can be reasonably
estimated. In situations where the Company can determine a best estimate within the range of potential loss, the Company records the best estimate of the
potential loss as a liability. In situations where the Company has determined a range of loss, but no amount within the range is a better estimate than any other
amount within the range, the Company records the minimum amount of the range of loss as a liability.
Discontinued Operations
In determining whether a group of assets disposed (or to be disposed) of should be presented as a discontinued operation, the Company makes a
determination of whether the group of assets being disposed of comprises a component of the entity; that is, whether it has historical operations and cash
flows that can be clearly distinguished (both operationally and for financial reporting purposes). The Company also determines whether the cash flows
associated with the group of assets have been significantly (or will be significantly) eliminated from the ongoing operations of the Company as a result of the
disposal transaction and whether the Company has no significant continuing involvement in the operations of the group of assets after the disposal transaction.
If these determinations can be made affirmatively, the results of operations of the group of assets being disposed of (as well as any gain or loss on the disposal
transaction) are aggregated for separate presentation apart from continuing operating results of the Company in the consolidated financial statements. See
"Note 4: Business Acquisitions, Dispositions and Other Significant Transactions" for additional information.
Comprehensive Income (Loss)
Comprehensive income (loss) is included within equity in the consolidated balance sheets and consists of net income (loss) and other gains and losses
affecting equity that, under GAAP, are excluded from net income (loss). For AOL, such items consist primarily of foreign currency translation gains (losses).
The following table sets forth other comprehensive income (loss), net of tax, accumulated in equity (in millions):
Foreign currency
translation
gains (losses)
Net unrealized
gains
(losses) on
securities
Net derivative
financial
instrument
gains (losses)
Net accumulated
other
comprehensive
income (loss)
Balance at December 31, 2006 $ (253.3) $ — $ 0.9 $ (252.4)
2007 activity 45.7 0.1 (0.3) 45.5
Balance at December 31, 2007 (207.6) 0.1 0.6 (206.9)
2008 activity (95.5) (0.1) 0.1 (95.5)
Balance at December 31, 2008 (303.1) — 0.7 (302.4)
2009 activity 28.0 — (0.7) 27.3
Balance at December 31, 2009 $ (275.1) $ — $ — $ (275.1)
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