Replies to post #596 on China MediaExpress Holdings, Inc. (fka CCME)

[Drexion2004]

Not positive but I am pretty sure they will amortize it over the lifetime. The contract can be considered an 'asset' and as time passes, it can 'depreciate' the value paid for it in a linear fashion.

-Fernando

[Smm70]

abh3vt - while the question was directed at Fernando, I would like to comment that, since the contracts provide a revenue stream recognized over several years, the corresponding costs to acquire such strategic contracts is typically, in our accounting world, paid in full but pro-rated and broken out into each month over the course of the contract shelf-life. In other words, we should not be seeing a one-time lump sum expense hitting the P&L, rather the expense is tied into the revenue for every month.

Now, that's how it would be done here in the US. Our friend, wow, umm, wow, you see...might opt to wow, wow.

SMM

[norweger1979]

from the 10k regarding costs

CME pays concession fees to the bus operators participating in its network on a monthly basis. However, the total concession fees payable under each long-term contract are charged to the consolidated statements of operations as concession expenses on a straight-line basis over the course of the contract period, based on the assumption that the concession fees increase by 10% per year. The differences between concession fee payments and concession fee expenses charged to the consolidated statements of operations are accrued as liability or recorded as reversal to the corresponding previously accrued liability. Changes in the estimation of annual increase will affect the amount of concession expenses to be charged to the consolidated statements of operations.