Intel 2009 Annual Report Download - page 65

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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Loans Receivable
We make loans to third parties that are classified within other current assets or other long-term assets. We may elect the fair
value option for loans when the interest rate or foreign exchange rate risk is hedged at inception with a related derivative
instrument. We record the gains or losses on these loans arising from changes in fair value due to interest rate, currency market
fluctuations, and credit market volatility, offset by losses or gains on the related derivative instruments, in interest and other,
net. Loans that are denominated in U.S. dollars and have a floating-rate coupon are carried at amortized cost. We measure
interest income for all loans receivable using the interest method, which is based on the effective yield of the loans rather than
the stated coupon rate.
Inventories
We compute inventory cost on a currently adjusted standard basis (which approximates actual cost on an average or
first-in, first-out basis). Inventories at year-ends were as follows:
Property, Plant and Equipment
Property, plant and equipment, net at year-ends was as follows:
We compute depreciation for financial reporting purposes using the straight-line method over the following estimated useful
lives: machinery and equipment, 2 to 4 years; buildings, 4 to 40 years.
We capitalize interest on borrowings related to eligible capital expenditures. Capitalized interest is added to the cost of
qualified assets and amortized over the estimated useful lives of the assets. We record capital-related government grants
earned as a reduction to property, plant and equipment.
57
(In Millions)
2009
2008
Raw materials
$
437
$
608
Work in process
1,469
1,577
Finished goods
1,029
1,559
Total inventories
$
2,935
$
3,744
(In Millions)
2009
2008
1
Land and buildings
$
16,687
$
16,557
Machinery and equipment
28,339
28,831
Construction in progress
2,796
2,730
Total property, plant and equipment, gross
47,822
48,118
Less:
accumulated depreciation
(30,597
)
(30,544
)
Total property, plant and equipment, net
$
17,225
$
17,574
1
As adjusted due to changes to the accounting for convertible debt instruments. See
“
Note 3: Accounting Changes.
”