Apple 1998 Annual Report Download - page 45

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
first quarter fiscal 1999 interim financial statements. Components of comprehensive income for the Company include such items as net income,
foreign currency translation items, and changes in the value of available-for-sale securities. SFAS No. 131 requires segments to be determined
and reported based upon how management measures performance and makes decisions about allocating resources. SFAS No. 131 will first be
reflected in the Company's fiscal 1999 consolidated financial statements.
In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" was issued. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, hedging activities, and exposure definition. SFAS No. 133 requires that an entity
recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. The
Statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. Earlier application of the Statement is permitted. The
Company is still in the process of assessing the impact that the Statement will have on the Company's results of operations, consolidated
financial position, and operating policies.
In October 1997, the American Institute of Certified Public Accountants (AICPA) issued Statement of Position (SOP) 97-
2, "Software Revenue
Recognition." SOP 97-2 establishes standards relating to the recognition of software revenue. SOP 97-2 is effective for transactions entered
into by the Company beginning in the first quarter of fiscal 1999. The Company does not expect the adoption of SOP 97-2 to have a material
impact on the Company's consolidated results of operations.
In March 1998, the AICPA issued SOP 98-
1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use," which
provides guidance on accounting for the costs of computer software intended for internal use. SOP 98-1 must be adopted by the Company
effective as of fiscal 2000 and is not expected to have a material impact on the Company's consolidated results of operations or financial
position.
NOTE 2--FINANCIAL INSTRUMENTS
INVESTMENTS
The following table summarizes the Company's available-for-sale securities at amortized cost, which approximates fair value, as of September
25, 1998, and September 26, 1997 (in millions):
As of September 25, 1998, there are no investments with maturities greater than 12 months. The Company's U.S. corporate securities include
commercial paper and corporate debt securities. Foreign
42
SEPTEMBER 25, 1998 SEPTEMBER 26, 1997
AMORTIZED COST AMORTIZED COST
------------------- -------------------
U.S. Treasury securities.............................. $ 10 $ 100
U.S. corporate securities............................. 785 327
Foreign securities.................................... 613 705
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Total included in cash and cash equivalents......... 1,408 1,132
U.S. corporate securities............................. 163 29
Foreign securities.................................... 656 200
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Total included in short-term investments............ 819 229
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Total............................................... $ 2,227 $ 1,361
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