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SEC Filings

S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 07/22/1999
Entire Document
 
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            AVALON CABLE OF MICHIGAN HOLDINGS, INC. AND SUBSIDIARIES
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (dollars in thousands except per share data)
                               December 31, 1998
 Use of estimates
 
   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
 Revenue recognition
 
   Revenues from cable services are recorded in the month the service is
provided. Installation fee revenue is recognized in the period in which the
installation occurs to the extent that direct selling costs meet or exceed
installation revenues.
 
 Advertising expense
 
   Advertising costs are expensed as incurred. Advertising expense charged to
operations was $82 for the year ended December 31, 1998.
 
 Concentration of credit risk
 
   Financial instruments which potentially expose the Company to a
concentration of credit risk include cash and subscriber and other receivables.
The Company had cash in excess of federally insured deposits at financial
institutions at December 31, 1998. The Company does not believe that such
deposits are subject to any unusual credit risk beyond the normal credit risk
associated with operating its business. The Company extends credit to customers
on an unsecured basis in the normal course of business. The Company maintains
reserves for potential credit losses and such losses, in the aggregate, have
not historically exceeded management's expectations. The Company's trade
receivables reflect a customer base centered in Michigan and New England. The
Company routinely assesses the financial strength of its customers; as a
result, concentrations of credit risk are limited.
 
 Property, plant and equipment
 
   Property, plant and equipment is stated at its fair value for items acquired
from Cable Michigan, historical cost for the minority interests' share of
Mercom property, plant and equipment and cost for additions subsequent to the
merger. Initial subscribers installation costs, including materials, labor and
overhead costs, are capitalized as a component of cable plant and equipment.
The cost of disconnection and reconnection are charged to expense when
incurred. Depreciation is computed for financial statement purposes using the
straight-line method based on the following lives:
 

<TABLE>
   <S>                                                               <C>
   Buildings and improvements....................................... 10-25 years
   Cable plant and equipment........................................  5-12 years
   Vehicles.........................................................  5years
   Office furniture and equipment...................................  5-10 years
</TABLE>

 
 
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