Electronic Arts 2009 Annual Report Download - page 190
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The impact on retained earnings is comprised of the following amounts (in millions):
Fiscal 2007 Beginning
Balance Adjustment
Year Ended March 31,
2006 2005 2004
Increase in operating income .............................. $13 $— $10 $3
Tax effect ............................................. (3) — (2) (1)
Increase in net income ................................... $10 $— $ 8 $2
Business Tax Expense Adjustment
We adjusted the beginning retained earnings balance for fiscal year 2007 related to the correction of our
historical accounting of certain business tax expenses. Our internal review indicated that we had inadvertently
not accrued for approximately $7 million in probable business tax obligations related to prior years. We believe
the impact of these adjustments were not material to prior years’ Consolidated Statements of Operations under
the rollover approach. However, under the iron curtain method, the cumulative business tax expense adjustments
were material to our fiscal year 2007 Consolidated Financial Statements and, therefore, we recognized the
following cumulative adjustment to our fiscal year 2007 opening Consolidated Balance Sheets (in millions):
Increase in accrued and other liabilities ....................................................... $7
Decrease in deferred income tax liabilities .................................................... (3)
Decrease in retained earnings .............................................................. (4)
The impact on retained earnings is comprised of the following amounts (in millions):
Fiscal 2007 Beginning
Balance Adjustment
Year Ended March 31,
2006 2005 2004 2003
Decrease in operating income ....................... $(7) $(3) $(2) $ (1) $ (1)
Tax effect ...................................... 3 1 1 1 —
Decrease in net income ............................ $(4) $(2) $(1) $— $ (1)
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