Electronic Arts 2007 Annual Report Download - page 174

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401(k) Plan and Registered Retirement Savings Plan
We have a 401(k) plan covering substantially all of our U.S. employees, and a Registered Retirement Savings
Plan covering substantially all of our Canadian employees. These plans permit us to make discretionary
contributions to employees’ accounts based on our financial performance. We contributed $3 million, $2 mil-
lion and $4 million to these plans in fiscal 2007, 2006 and 2005, respectively.
(13) COMPREHENSIVE INCOME
SFAS No. 130, “Reporting Comprehensive Income”, requires classifying items of other comprehensive income
(loss) by their nature in a financial statement and displaying the accumulated balance of other comprehensive
income separately from retained earnings and additional paid-in capital in the equity section of a balance
sheet. Accumulated other comprehensive income primarily includes foreign currency translation adjustments,
and the net-of-tax amounts for unrealized gains (losses) on investments and unrealized gains (losses) on
derivatives designated as cash flow hedges. Foreign currency translation adjustments are not adjusted for
income taxes as they relate to indefinite investments in non-U.S. subsidiaries.
The change in the components of accumulated other comprehensive income is summarized as follows (in
millions):
Foreign
Currency
Translation
Adjustment
Unrealized
Gains
(Losses) on
Investments,
net
Unrealized
Gains
(Losses) on
Derivative
Instruments,
net
Accumulated
Other
Comprehensive
Income
Balances as of March 31, 2004 . . ............... $20 $ — $— $ 20
Other comprehensive income . . . ............... 10 26 — 36
Balances as of March 31, 2005 . . ............... 30 26 — 56
Other comprehensive income (loss) .............. (10) 37 — 27
Balances as of March 31, 2006 . . ............... 20 63 — 83
Other comprehensive income . . . ............... 23 188 — 211
Balances as of March 31, 2007 . . ............... $43 $251 $ — $294
The change in unrealized gains (losses) on investments is shown net of taxes of less than $1 million in fiscal
2007, $0 in fiscal 2006, and $1 million in fiscal 2005.
During fiscal 2007, we realized substantially all gains and losses outstanding from our derivative instruments.
During fiscal 2006, we realized all gains and losses outstanding from our derivative instruments. In fiscal
2005, activity related to derivatives was not material. See Note 3 of the Notes to Consolidated Financial
Statements.
(14) STAFF ACCOUNTING BULLETIN No. 108
In September 2006, the SEC issued SAB No. 108, “Financial Statements — Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”. SAB No. 108
provides guidance on how prior year misstatements should be taken into consideration when quantifying
misstatements in current year financial statements for purposes of determining whether the current year’s
financial statements are materially misstated. We adopted SAB No. 108 in fiscal 2007.
In accordance with SAB No. 108, we considered both the “rollover” approach, which quantifies misstatements
originating in the current year income statement and the “iron curtain” approach which quantifies
100