Apple 2004 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2004 Apple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

The following table reconciles changes in the Company's asset retirement liabilities for fiscal 2003 and 2004 (in millions):
Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets
The Company reviews property, plant, and equipment and certain identifiable intangibles, excluding goodwill, for impairment whenever events
or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by
comparison of its carrying amount to future undiscounted cash flows the assets are expected to generate. If property, plant, and equipment and
certain identifiable intangibles are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of
the assets exceeds its fair market value. For the three years ended September 25, 2004, September 27, 2003, and September 28, 2002 the
Company had no material impairment of its long-lived assets, except for the impairment of certain assets in connection with the restructuring
actions described in Note 5.
The Company adopted SFAS No. 142, Goodwill and Other Intangible Assets , in the first quarter of fiscal 2002. SFAS No. 142 requires that
goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually or sooner
whenever events or changes in circumstances indicate that they may be impaired. Prior to fiscal 2002, goodwill was amortized using the straight-
line method over its estimated useful life. The Company completed its transitional goodwill impairment test as of October 1, 2001, and its annual
goodwill impairment tests on August 30 of each year thereafter and found no impairment. The Company established reporting units based on its
current reporting structure. For purposes of testing goodwill for impairment, goodwill has been allocated to these reporting units to the extent it
relates to each reporting unit.
SFAS No. 142 also requires that intangible assets with definite lives be amortized over their estimated useful lives and reviewed for impairment
in accordance with SFAS No. 144, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of . The
Company is currently amortizing its acquired intangible assets with definite lives over periods ranging from 3 to 10 years.
Foreign Currency Translation
The Company translates the assets and liabilities of its international non-U.S. functional currency subsidiaries into U.S. dollars using exchange
rates in effect at the end of each period. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect
during the period. Gains and losses from these translations are credited or charged to foreign currency translation included in "accumulated other
comprehensive income (loss)" in shareholders' equity. The Company's foreign manufacturing subsidiaries and certain other international
subsidiaries that use the U.S. dollar as their functional currency remeasure monetary assets and liabilities at exchange rates in effect at the end of
each period, and inventories, property, and nonmonetary assets and liabilities at historical rates. Gains and
67
Asset retirement liability as of September 29, 2002
$
5.5
Additional asset retirement obligations recognized
0.5
Accretion recognized
1.2
Asset retirement liability as of September 27, 2003
$
7.2
Additional asset retirement obligations recognized
0.5
Accretion recognized
0.5
Asset retirement liability as of September 25, 2004
$
8.2