Intel 2009 Annual Report Download - page 62

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Basis of Presentation
We have a 52- or 53-week fiscal year that ends on the last Saturday in December. Fiscal years 2009, 2008, and 2007 were all
52-week years. Our consolidated financial statements include the accounts of Intel Corporation and our wholly owned
subsidiaries. Intercompany accounts and transactions have been eliminated. We use the equity method to account for equity
investments in instances in which we own common stock or similar interests, and have the ability to exercise significant
influence, but not control, over the investee. The U.S. dollar is the functional currency for Intel and our subsidiaries; therefore,
we do not have a translation adjustment recorded through accumulated other comprehensive income (loss).
Customer credit balances are included in other accrued liabilities and were $293 million as of December 26, 2009 ($447
million as of December 27, 2008).
We have evaluated subsequent events through the date that the financial statements were issued on February 22, 2010.
Note 2: Accounting Policies
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires
us to make estimates and judgments that affect the amounts reported in our consolidated financial statements and the
accompanying notes. The accounting estimates that require our most significant, difficult, and subjective judgments include:
The actual results that we experience may differ materially from our estimates.
Trading Assets
Marketable debt instruments are designated as trading assets when the interest rate or foreign exchange rate risk is hedged at
inception with a related derivative instrument. Investments designated as trading assets are reported at fair value. The gains or
losses of these investments arising from changes in fair value due to interest rate and currency market fluctuations and credit
market volatility, offset by losses or gains on the related derivative instruments, are recorded in interest and other, net. We also
designate certain floating-rate securitized financial instruments, primarily asset-backed securities purchased after December
30, 2006, as trading assets.
During 2009, we sold our equity securities offsetting deferred compensation and entered into derivative instruments that seek
to offset changes in liabilities related to these deferred compensation arrangements. Gains or losses from changes in fair value
of these equity securities were offset against losses or gains on the related liabilities and included in interest and other, net. See
“Note 8: Derivative Financial Instruments” for further information on our equity market risk management programs.
Available
-for-Sale Investments
We consider all liquid available-for-sale debt instruments with original maturities from the date of purchase of approximately
three months or less to be cash and cash equivalents. Available-for-sale debt instruments with original maturities at the date of
purchase greater than approximately three months and remaining maturities of less than one year are classified as short-term
investments. Available-for-sale debt instruments with remaining maturities beyond one year are classified as other long-term
investments.
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•
the valuation of non
-
marketable equity investments and the determination of
other
-
than
-
temporary
impairments;
•
the assessment of recoverability of long
-
lived assets;
• the recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax
positions); and
•
the valuation of inventory.