Symantec 2004 Annual Report Download - page 58

«56»SYMANTEC CORPORATION
Legal Expenses We accrue estimated legal expenses when the
likelihood of the incurrence of the related costs is probable and
management has the ability to estimate such costs. If both of
these conditions are not met, management records the related
legal expenses when incurred. Amounts accrued by us are not
discounted. The material assumptions used to estimate the
amount of legal expenses include:
•the monthly legal expense incurred by our external attorneys
on the particular case being evaluated;
•communication between us and our external attorneys on the
expected duration of the lawsuit and the estimated expenses
during that time;
•our strategy regarding these lawsuits;
•deductible amounts under our insurance policies; and
•past experiences with similar lawsuits.
Accumulated Other Comprehensive Income We report
comprehensive income or loss in accordance with the provisions
of SFAS No. 130, Reporting Comprehensive Income, which
establishes standards for reporting comprehensive income and
its components in the financial statements. The components of
other comprehensive income (loss) consist of unrealized gains
and losses on marketable securities, net of taxes and foreign
currency translation adjustments, net of taxes. Unrealized gains
and losses on our available-for-sale securities is immaterial for
all periods presented. Comprehensive income (loss) and the
components of accumulated other comprehensive income are
presented in the accompanying Consolidated Statements of
Stockholders’ Equity.
Newly Adopted and Recently Issued Accounting Pronouncements
In August 2001, the FASB issued SFAS No. 143, Accounting for
Asset Retirement Obligations. Under SFAS No. 143, the fair value
of a liability for an asset retirement obligation must be recognized
in the period in which it is incurred if a reasonable estimate of fair
value can be made. The associated asset retirement costs are
capitalized as part of the carrying amount of the long-lived asset.
SFAS No. 143 became effective for Symantec beginning in the first
quarter of fiscal 2004 and the adoption of this statement did not have
a material impact on our financial position or results of operations.
In December 2003, the FASB revised Interpretation No. 46,
Consolidation of Variable Interest Entities, an Interpretation of
ARB No. 51 (FIN 46R), which addresses how a business enterprise
should evaluate whether it has a controlling interest in an entity
through means other than voting rights and accordingly should
consolidate the entity. FIN 46R replaces FASB Interpretation No.
46, which was issued in January 2003. Before concluding that it is
appropriate to apply the voting interest consolidation model to
an entity, an enterprise must first determine that the entity is not
a variable interest entity or a special purpose entity. FIN 46R
became effective for Symantec during fiscal 2004 and the adoption
of this statement did not have a material impact on our financial
position or results of operations.
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity, which provides guidance for classification and measurement
of certain financial instruments with characteristics of both liabilities
and equity. SFAS No. 150 became effective for financial instruments
entered into or modified after May 31, 2003, and otherwise became
effective for Symantec beginning the second quarter of fiscal
2004 and the adoption of this statement did not have a material
impact on our financial position or results of operations.
Reclassifications Certain previously reported amounts have
been reclassified to conform to the current financial statement
presentation with no impact on net income (loss).
2004 Annual Report