Company: DSNY
Filing Date: 2025-11-24
Form Type: 10-K
Source: 0001062993-25-016994
Chunk: 450

Company: DESTINY MEDIA TECHNOLOGIES INC
Filing Date: 2025-11-24
Form: 10-K
Item: Item 1
Chunk 450
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 over an estimated performance period.

                                    29
                                    
                                    2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT'D

                            Contract Costs
                            Contract costs consist of two components, customer acquisition costs and costs to fulfill a contract. Customer acquisition costs are capitalized only if the costs are incrementally incurred to obtain a customer contract and may consist of sales commissions paid to sales personnel or third-party resellers. Generally, the Company does not incur any contract costs outside of the period that the related revenue is recognized.
                            Contract Modifications
                            Contract modifications may create new, or change existing, enforceable rights and obligations of the parties to the contract. We generally modify an existing contract using an addendum or signed change order. A contract modification is accounted for as a new contract if it reflects an increase in scope that is regarded as distinct from the original contract and is priced in-line with the standalone selling price for the related product or services obligated. If a contract modification is not considered a new contract, the modification is combined with the original contract and the impact on the revenue recognition profile depends on whether the remaining products and services are distinct from the original contract. If the remaining goods or services are distinct from those in the original contract, all remaining performance obligations will be accounted for on a prospective basis with unrecognized consideration allocated to the remaining performance obligations. If the remaining goods or services are not distinct, the modification will be treated as if it were a part of the existing contract, and the effect that the contract modification has on the transaction price, and on our measure of progress toward satisfaction of the performance obligations, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification on a cumulative catch-up basis.

                            Cost of revenue
                            Cost of revenue primarily consists of personnel costs for our operations service and technical support employees and engineering support staff, cloud infrastructure costs, incremental transaction costs such as merchant and processing fees, and costs of external customer support software and services.  In each case, personnel costs include salaries, benefits and any other compensation paid to such staff.

                            Translation of foreign currencies
                            The Company's reporting and functional currency is the U.S. dollar, except for its subsidiary, Destiny Software Productions, Inc., whose functional currency is the Canadian dollar. Financial statements of foreign operations for which the functional currency is the local currency are translated into U.S. dollars with assets and liabilities translated at the rate of exchange in effect at the balance sheet date and revenue and expense items translated at the