Symantec 2000 Annual Report Download - page 36

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Summary of Significant Accounting Policies
Business Symantec, a world leader in Internet security tech-
nology, provides a broad range of content and network security
solutions to individuals and enterprises.
Principles of Consolidation The accompanying consolidated
financial statements include the accounts of Symantec Corporation
and its wholly owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
Acquisitions and Divestitures During the September 1999 quar-
ter, we acquired URLabs. During the March 2000 quarter, we
acquired L-3Network Security’s operations and 20/20 Software.
Each of these acquisitions was accounted for as a purchase and,
accordingly, their operating results have been included in our
consolidated financial statements since their respective dates
of acquisition.
During the March 1999 quarter, we acquired Quarterdeck. During
the September 1998 quarter, we acquired Intel’s anti-virus business.
During the June 1998 quarter, we acquired IBM’s anti-virus busi-
ness and Binary Research Limited’s operations. Each of these
acquisitions was accounted for as a purchase and, accordingly,
their operating results have been included in our consolidated
financial statements since their respective dates of acquisition.
We made no acquisitions during fiscal 1998.
On December 31, 1999, we divested our Visual Café and substan-
tially all of our ACT! product lines. Because these divestitures
were effective at the close of business on December 31, 1999,
these product lines are included in the results of operations
through December 31, 1999 and are included in our results of
operations for fiscal 1999 and 1998.
Fiscal Years Symantec has a 52/53-week fiscal accounting
year. Accordingly, all references as of and for the periods ended
March 31, 2000, 1999 and 1998 reflect amounts as of and for the
periods ended March 31, 2000, April 2, 1999 and April 3, 1998,
respectively. The fiscal accounting years ended March 31, 2000
and April 2, 1999 each comprised 52 weeks of operations and the
fiscal accounting year ended April 3, 1998 comprised 53 weeks
of operations.
Use of Estimates The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
Foreign Currency Translation The functional currency of our
foreign subsidiaries is the local currency. Assets and liabilities
denominated in foreign currencies are translated using the
exchange rate on the balance sheet dates. The translation adjust-
ments resulting from this process are shown separately as a
component of stockholders’ equity. Revenues and expenses are
translated using average exchange rates prevailing during the
year. Foreign currency transaction gains and losses are included in
the determination of net income.
Revenue Recognition Under Statement of Position (“SOP”) 97-2
as modified by SOP 98-4 and SOP 98-9, we recognize revenue upon:
•persuasive evidence of an arrangement;
•delivery of software to the customer;
•determination that there are no significant post-delivery
obligations; and
•collection of a fixed or determinable license fee consid-
ered probable.
We defer revenue relating to all distribution and reseller channel
inventory in excess of defined inventory levels in these channels.
We offer the right of return of our products under various policies.
We estimate and maintain reserves for product returns. We rec-
ognize revenue upon shipment when no significant vendor
obligations remain and collection of the receivable, net of provi-
sions for estimated returns, is probable.
Revenues related to significant post-contract support agreements
(generally product maintenance agreements) are deferred and
recognized over the period of the agreements. The estimated cost
for providing post-contract support (generally telephone support)
is accrued at the time of the sale and is included in sales and
marketing expense.
Royalty revenues are recognized as earned unless collection of
such revenues is not assured. When collection is not assured, rev-
enues are recognized as payments are received.
Cash Equivalents, Investments and Restricted Investments
Symantec considers investments in highly liquid instruments pur-
chased with an original maturity of 90 days or less to be cash
equivalents. All of our cash equivalents, short-term investments,
long-term investments and restricted investments are classified
as available-for-sale as of the balance sheet dates. These secu-
rities are reported at fair market value and any unrealized gains
and losses, net of applicable tax effects, are included in stock-
holders’ equity. Realized gains and losses and declines in value
judged to be other-than-temporary are included in interest
income. The cost of securities sold is based upon the specific
identification method.