Electronic Arts 2010 Annual Report Download - page 157

Annual Report
(b) The contingent consideration represents the estimated fair value of the additional variable cash consideration
payable in connection with our acquisition of Playfish Limited (“Playfish™”) that is contingent upon the
achievement of certain performance milestones. We estimated the fair value using expected future cash flows
over the period in which the obligation is expected to be settled, and applied a discount rate that appropriately
captures a market participant’s view of the risk associated with the obligation.
(c) The change in fair value is included in acquisition-related contingent consideration on our Consolidated
Statements of Operations.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The following table presents financial instruments and non-financial assets that were measured and recorded at
fair value on a nonrecurring basis during the fiscal years ended March 31, 2010 and 2009, and the impairments
on those assets (in millions):
Fair Value Measurements Using
Quoted Prices in
Active Markets for
Identical Assets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
Net Carrying
Value as of
March 31, 2010 (Level 1) (Level 2) (Level 3)
Total Impairments
for the Year Ended
March 31, 2010
Assets
Property and equipment, net(a) ...... $20 $— $19 $ 4 $ 5
Acquisition-related intangibles ..... — — — — 10
Abandoned rights to intellectual
property ..................... — — — — 10
Total impairments for assets held
as of March 31, 2010 ......... 25
Impairment on acquisition-related
intangibles no longer held ......... 1
Impairment on property and equipment
no longer held .................. 13
Total impairments recorded for
non-recurring measurements . . . $39
Net Carrying
Value as of
March 31, 2009 (Level 1) (Level 2) (Level 3)
Total Impairments
for the Year Ended
March 31, 2009
Assets
Other investments ............... $ 8 $— $ 8 $— $10
Total impairments for assets held
as of March 31, 2009 ......... $10
(a) Our carrying value as of March 31, 2010, did not equal our fair value measurements at the time of the
impairments due to the subsequent recognition of depreciation expense.
In connection with our fiscal 2010 restructuring, certain of our property and equipment, acquisition-related
intangibles, and abandoned rights to intellectual property were impaired during the fiscal year ended March 31,
2010 due to events and circumstances that indicated that the carrying value of the assets was not recoverable.
These impairments are included in restructuring charges in our Consolidated Statements of Operations.
Other investments included in the table above were measured and recorded on a nonrecurring basis using other
observable market inputs for comparable instruments. During the fiscal year ended March 31, 2009, we measured
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