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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 2010, 2009, and 2008 were all
52-week years. Fiscal year 2011 is a 53-week year. 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. For all fiscal years presented, 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).
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.
Fair Value
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. When determining fair value, we consider the principal or most
advantageous market in which we would transact, and we consider assumptions that market participants would use when
pricing the asset or liability. Our financial instruments are measured and recorded at fair value, except for equity method
investments, cost method investments, cost method loans receivable, and most of our liabilities.
Fair Value Hierarchy
The three levels of inputs that may be used to measure fair value are as follows:
Level 1.
Quoted prices in active markets for identical assets or liabilities.
Level 2.
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in
markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all
significant inputs are observable or can be derived principally from or corroborated with observable market data for
substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can
be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.
Level 3.
Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets
or liabilities. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were
unable to corroborate with observable market data.
For further discussion of fair value, see “Note 5: Fair Value” and “Note 22: Retirement Benefit Plans.”
Trading Assets
Marketable debt instruments are designated as trading assets when the interest rate or foreign exchange rate risk is
economically 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, as
trading assets.
52
•
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);
•
the valuation of inventory; and
•
the recognition and measurement of loss contingencies.