1. Supplemental Notes

2. Best Practice Suggestions

1. SUPPLEMENTAL NOTES

10 January 2012

1.7.A [Additional information to Supplemental Note 1.7 dated 15 November 2011] The applicant can submit the annual report for the most recent year ending before the start of the application window on 12 January 2012. In addition, the applicant must also provide an interim report for the most recent period ending prior to the opening of the application window. For example, an annual report dated 31 March 2011 and an interim report for the quarter ending 31 December 2011 should both suffice.

1.8 The requirement is for the applying entity to provide financial statements so that the evaluation panels can review prior operating history. Audited or independently certified financial statements provide increased certainty of the figures contained in the financial statements. However, if the applying entity does not have audited financial statements because it may be a new entity or has different reporting requirement under its organizational structure (corporate or jurisdictional requirements) then this must be clearly explained. Unaudited financial statements can then be provided.

1.9 For newly formed entities, “pro forma” financial statements are defined as the balance sheet, income statement, statement of shareholders equity/partner capital, cash flow statement, and letter of auditor or independent certification, if applicable.  The financial statements provide the evaluation panels with some financial sense of the entity applying for a gTLD, even if newly formed.

15 November 2011

1.1 If providing audited financial statements, applicants must provide the entire financial statement package, including income statement, balance sheet, cash flow statement, statement of stockholders’ equity or equivalent, and notes to the financial statement. This applies to both interim (where applicable) and annual financial statements.

Notes to financial statements provide further detail on the material items and/or impacts to the financial statements . Notes to financial statements generally (where applicable) describe, but would not be limited to, the following:

• accounting methodologies


• significant accounts (e.g., revenues, accounts receivables, taxes)


• information on substantial debt and debt-like items (e.g., lines of credit, pension plans, etc.)


• off-balance sheet liabilities that could have a material impact on the financial statements


• other commitments and contingent items (e.g., lawsuits, regulatory actions, etc.)

Additionally, notes would be expected to discuss subsequent events that may have occurred after the completion date of the statements.

1.2 If providing unaudited financial statements, applicants should provide supporting notes to the financial statements that describe the accounting methodology and any other relevant disclosures. See supplemental note 1.1 above for more information on notes to financial statements.

1.3 If accounting standards other than GAAP and IFRS are used, applicants must describe the accounting standards utilized in detail and reference the national agency or jurisdiction that governs such reporting.

1.4 If the financial statements reflect a going concern, unfunded liabilities, and/or equity deficiencies, applicants should disclose such items and provide an explanation of how these balances may impact the organization.

1.5 If the financial statements provided do not contain income statement, balance sheet, cash flow statement, statement of stockholders’ equity, applicants must provide a detailed explanation of the absence of such documents. The explanation must be signed by the highest officer responsible for the proposed registry, and contain the equivalent of notes to financial statements. See supplemental note 1.1 above for more information on notes to financial statements.

1.6 The interim period of financial statements is defined by the applicant. ICANN requests that the applicant provides the most recent quarterly or monthly financial statements, and clearly describe the period(s) to which they relate.

1.7 The annual period of financial statements should be the applicant’s annual reporting period. This may be a calendar or fiscal year.

2. BEST PRACTICE SUGGESTIONS:

15 November 2011

2.1 Applicants should read each evaluation question in its entirety, including the notes, criteria, and scoring text. The answer should address all criteria specified, and include detailed rationale demonstrating a thorough understanding of the criteria (i.e., show your work).

2.2 If acronyms are used, applicants should spell out the first instance, even if the acronyms represent a common term/product/service.

DISCLAIMER: This material is for information only and does not represent of all requirements and criteria that the applicant must satisfy. ICANN is not providing legal, financial, business or any other kind of advice. This material does not represent a modification to the Applicant Guidebook, or the terms and conditions to the new gTLD program. This material also does not represent a waiver of any ICANN policy, procedure or agreement. In the event that any information provided in this material appears to be inconsistent with any information published elsewhere by ICANN, please do not rely on this material without confirmation or clarification from ICANN.