NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The unaudited interim condensed consolidated financial statements have been prepared in accordance with United States generally accepted
accounting principles (U.S. GAAP). All inter-company transactions and balances between the Company, its subsidiaries, VIEs and subsidiaries of the VIEs are eliminated upon consolidation.
Unaudited Interim Condensed Consolidated Financial Statements
In the opinion of management, the unaudited interim condensed consolidated financial statements, which comprise the condensed consolidated
balance sheet of the Company as of March 31, 2017, the condensed consolidated statements of comprehensive income and the condensed consolidated statements of cash flows for the three-month periods ended March 31, 2017 and 2016, reflect all
adjustments, consisting of normal and recurring adjustments, necessary to present fairly the Companys consolidated financial position as of March 31, 2017, the Companys consolidated results of operations and consolidated cash flows
for the three-month periods ended March 31, 2017 and 2016. Interim period results are not necessarily indicative of results of operations or cash flows for a full-year period. The consolidated balance sheet data as of December 31, 2016 was
derived from the Companys audited financial statements, but does not include all disclosures required by U.S. GAAP for annual financial statements.
These financial statements and the notes thereto should be read in conjunction with the Companys audited consolidated financial
statements for the year ended December 31, 2016.
Use of Estimates
The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period.
Management evaluates estimates, including those related to the accounts receivable allowances, credit loss allowance for micro loan receivables, fair values of options to purchase the Companys or its subsidiaries ordinary shares, fair
values of certain debt and equity investments, amortization and net realizable value of licensed copyrights, impairment of long-lived assets, long-term investments and goodwill, the purchase price allocation and fair value of noncontrolling
interests with respect to business combinations and acquisition of equity method investees, deferred tax valuation allowance, and redeemable noncontrolling interests, among others. Management bases the estimates on historical experience and on
various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates.
Currency Translation for Financial Statements Presentation
Translations of amounts from Renminbi (RMB) into U.S. Dollars (US$) for the convenience of the reader have been
calculated at the exchange rate of RMB6.8832 per US$1.00 on March 31, 2017, as published on the website of the United States Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into U.S.
dollars at such rate.
||SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The following accounting policies do not
include all of the significant accounting policies of the Company, which were included in, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2016.