Apple 1997 Annual Report Download - page 41

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PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment is stated at cost. Depreciation and amortization is computed by use of the declining balance and straight-line
methods over the estimated useful lives of the assets, which are 30 years for buildings and from two to ten years for all other assets.
LONG-LIVED ASSETS
In accordance with the provisions of Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" ("FAS 121"), the Company reviews for the impairment of long-lived assets and certain
identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Under FAS 121, an impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its
eventual disposition is less than its carrying amount. The only such impairment losses identified by the Company as of September 26, 1997 and
September 27, 1996 were those recorded in connection with the restructuring of its operations. Information regarding the Company's
restructuring of operations may be found under the heading "Restructuring of Operations" included in these Notes to Consolidated Financial
Statements.
STOCK-BASED COMPENSATION
In accordance with the provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("FAS 123"), which the Company adopted in 1997, the Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and related interpretations in accounting for its employee stock option plans.
Under APB 25, if the exercise price of the Company's employee stock options equals or exceeds the fair value of the underlying stock on the
date of grant, no compensation expense is recognized.
Information regarding the Company's pro forma disclosure of stock-based compensation pursuant to FAS 123 may be found under the heading
"Shareholders' Equity" in these Notes to Consolidated Financial Statements.
FOREIGN CURRENCY TRANSLATION
The Company translates the assets and liabilities of its foreign sales subsidiaries at year-end exchange rates. Gains and losses from these
translations are credited or charged to "accumulated translation adjustment" included in "other" in shareholders' equity. The foreign
manufacturing, distribution and certain other entities use the U.S. dollar as the functional currency and translate monetary assets and liabilities
at year-end exchange rates, and inventories, property, and non-monetary assets and liabilities at historical rates. Gains and losses from these
translations are included in the consolidated results of operations and are immaterial.
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.
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