Apple 1999 Annual Report Download - page 46

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SEGMENT INFORMATION
During 1999, the Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." SFAS No. 131
supersedes SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise," replacing the "industry segment" approach with the
"management" approach. The management approach designates the internal reporting used by management for making decisions and assessing
performance as the source of the Company's reportable segments. SFAS No. 131 also requires disclosures about products, major customers,
and geographic areas on a company-wide basis. The adoption of SFAS No. 131 did not affect results of operations or the financial position of
the Company but did affect the disclosure of segment information.
RECENT ACCOUNTING PRONOUNCEMENTS
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 an entity to
recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value.
Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the
hedge, changes in fair value will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through
earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. In June 1999, SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133," was issued. The
statement defers the effective date of SFAS No. 133 until the first quarter of fiscal 2001. Although the Company continues to review the effect
of the implementation of SFAS No. 133, the Company does not currently believe its adoption will have a material impact on its financial
position or overall trends in results of operations and does not believe adoption will result in significant changes to its financial risk
management practices. However, the impact of adoption of SFAS No. 133 on the Company's results of operations is dependent upon the fair
values of the Company's derivatives and related financial instruments at the date of adoption.
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 developing 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 results of operations or financial position.
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