NOTE 1. BASIS OF PRESENTATION

Description of Business

Salem Media Group, Inc. (“Salem” “we,” “us,” “our” or the “company”) is a domestic multimedia company specializing in Christian and conservative content. Our media properties include radio broadcasting, digital media, and publishing entities. We have three operating segments: (1) Broadcast, (2) Digital Media, and (3) Publishing, which are discussed in Note 19—Segment Data.

The accompanying Consolidated Financial Statements of Salem include the company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Significant areas for which management uses estimates include:

 

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revenue recognition,

 

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asset impairments, including broadcasting licenses, goodwill and other indefinite-lived intangible assets;

 

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probabilities associated with the potential for contingent earn-out consideration;

 

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fair value measurements;

 

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contingency reserves;

 

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allowance for doubtful accounts;

 

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sales returns and allowances;

 

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barter transactions;

 

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inventory reserves;

 

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reserves for royalty advances;

 

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fair value of equity awards;

 

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self-insurance reserves;

 

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estimated lives for tangible and intangible assets;

 

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income tax valuation allowances; and

 

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uncertain tax positions.

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation.