Management of the Company is required to make certain estimates. judgments and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments and assumptions impact the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates and judgments including those related to: the carrying value of accounts receivable. including the determination of the allowance for doubtful accounts and revenue reserves: the useful lives and recovery of property and equipment: and the liabilities for uncertain tax positions. The Company bases its estimates and judgments on historical experience, its forecasts and budgets and other factors that the Company considers relevant. Revenue recognition The Company's revenue is derived both from subscription fees and on-line advertising revenue. Subscription fees are generated from customers for our subscription-based online personals and related services. Revenue is presented net of credits and credit card chargebacks. Revenue recognition occurs ratably over the terms of the applicable subscriptions. which primarily range from one to twelve months. beginning when there is persuasive evidence of an arrangement, delivery has occurred (access has been granted), the fees are fixed or determinab4e, and collection is reasonably assured. Subscribers pay in advance, primarily by using a credit card, and, subject to certain conditions identified in our terms and conditions, all purchases are final and nonrefundable. Fees collected in advance for subscriptions are deferred and recognized as revenue using the straight- line method over the term of the applicable subscription period. POF also earns revenue from online advertising which is recognized every time an ad F-75 is d splayed Dc'cr'ed crut: s 55 7 m