PRSS 2017 Annual Report

52 We have elected to use the “with and without” approach in determining the order in which tax attributes are utilized. As a result, we will only recognize a tax benefit for stock-based awards in additional paid-in capital if an incremental tax benefit is realized after all other tax attributes currently available to us have been utilized. Cash and Cash Equivalents Cash and cash equivalents include cash on deposit in overnight deposit accounts and investments in money market accounts with an original maturity of 90 days or less at the time of purchase. Short-Term Investments We classify short-term investment, which consist of marketable securities with original maturities in excess of 90 days as available- for-sale. Short-term investments are reported at fair value with unrealized gains and losses on such securities reflected, net of tax, as other comprehensive income (loss) in accumulated deficit in the Consolidated Balance Sheets. Realized gains and losses on investments are included in other income (loss) and are derived using the specific identification method for determining the cost of securities sold. Short-term investments are reviewed quarterly to identify possible other-than-temporary impairment. When evaluating the investments, we review factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, our intent to sell, or whether it would be more likely than not that we would be required to sell the investments before the recovery of their amortized cost basis. Accounts Receivable Accounts receivable consist primarily of uncleared credit card transactions at period end and trade amounts due from customers. Accounts receivable are recorded at invoiced amounts and do not bear interest. We have not experienced significant credit losses from our accounts receivable. We perform a regular review of our customers’ payment histories and associated credit risks, and we do not require collateral from our customers. Internal Use Software and Website Development Costs We capitalize eligible costs associated with website development and for software developed or obtained for internal use. We expense all costs that relate to the planning associated with website development and for the post-implementation phases of development as product development expense. Payroll and payroll-related costs incurred in the development phase are capitalized and amortized over the product’s estimated useful life of two years. Costs associated with repair or maintenance are expensed as incurred. For the years ended December 31, 2017 and 2016, we capitalized $2.4 million in each year respectively, of website development costs and software development costs related to software for internal use. Capitalized internal use software is included in property and equipment, net. Fair Value of Assets and Liabilities We record our financial assets and liabilities at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding 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 an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Certain financial instruments are carried at cost on the Consolidated Balance Sheets, which approximates fair value due to their short-term, highly liquid mature. The carrying amounts of cash and cash equivalents, money market accounts, accounts receivable and accounts payable approximate fair value due to the short-term nature of such instruments.