Apple 1996 Annual Report Download - page 35

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Revenue Recognition
The Company recognizes revenue at the time products are shipped. Provisions are made currently for estimated product returns and price
protection that may occur under Company programs. Historically, actual amounts recorded for product returns and price protection have not
varied significantly from estimated amounts.
Warranty Expense
The Company provides currently for the estimated cost that may be incurred under product warranties when products are shipped.
Advertising Costs
Advertising costs are charged to expense the first time the advertising takes place.
Earnings (Loss) per Share
Earnings (loss) per share is computed using the weighted average number of common shares outstanding and (in 1995 and 1994 only) the
dilutive effect of common stock options using the treasury stock method. Common stock options, the convertible subordinated notes, and
certain common shares issued pending shareholder approval were not included in the computation of loss per share in 1996 as their effect was
antidilutive.
Reclassifications
Certain prior year amounts in the Industry Segment and Geographic Information footnote have been reclassified to conform to the current
year's presentation.
Financial Instruments
Investments
The following table summarizes the Company's available-for-sale securities as of September 27, 1996:
(In millions)
33
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
U.S. Treasury securities
and obligations of U.S.
government agencies $ 86 $ -- $ -- $ 86
U.S. corporate debt
securities 330 -- -- 330
Foreign government
securities 1,098 -- -- 1,098
Total included in
cash and cash
equivalents $1,514 $ -- $ -- $1,514
U.S. corporate debt
securities $ -- $ -- $ -- $ --
Foreign government
securities 193 -- -- 193
Total included in
short-term
investments $ 193 $ -- $ -- $ 193
Equity securities $ -- $ 2 $ -- $ 2
Total included in
other assets $ -- $ 2 $ -- $ 2
Total $1,707 $ 2 $ -- $1,709