Revenue Recognition The Company s income is generated mainly through (1) sales of automobiles, (2) service fees paid by customers for assistance in obtaining bank financing for purchases of automobiles ( financing services ), (3) web-based advertising service fees, including fees from (i) displaying graphical advertisements on the Company websites and (ii) web-based listing services that allow customers to place automobile related information on the Company s websites, (4) automobile value added services, and (5) airport auto mall automotive services. As indicated above, as of March 1, 2014, the Company no longer performs auto mall management services, and therefore, it will no longer recognize revenue related to such services. The Company recognizes revenue when there is persuasive evidence of an arrangement, delivery has occurred upon shipment or services have been rendered, the seller s price to the buyer is fixed or determinable, and collectibility is reasonably assured. The Company recognizes the sales of automobiles upon delivery and acceptance by the customers and where collectibility is reasonably assured. Service revenue related to financing services is recognized ratably over the financing period. Service fees for graphical advertisements on the Company s websites are charged on a fixed fee basis. The Company recognizes the advertising revenue when the service is performed over the service term. The Company charges a monthly fee for listing services and recognizes the revenue when services are performed. The Company offers sales incentives to its customers in the form of (i) subscription exemption; (ii) discounted prices and (iii) free advertisements. The Company classifies sales incentives as a reduction of net revenues. Revenues, net of discounts and allowances, are recognized ratably over the service periods. The Company recognizes revenue from automobile value added services when such services are performed. Airport auto mall automotive services include (i) the rental of the Airport International Au