Symantec 2007 Annual Report Download - page 80

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Foreign Currency Translation
The functional currency of our foreign subsidiaries is generally the local currency. Assets and liabilities
denominated in foreign currencies are translated using the exchange rate on the balance sheet dates. The translation
adjustments resulting from this process are included as a component of Stockholders’ equity in Accumulated other
comprehensive income. Revenues and expenses are translated using monthly average exchange rates prevailing
during the year. Foreign currency transaction gains and losses are included in Other income (expense), net in the
Consolidated Statements of Income. Deferred tax assets (liabilities) are established on the cumulative translation
adjustment attributable to unremitted foreign earnings that are not intended to be indefinitely reinvested.
Revenue Recognition
We market and distribute our software products both as stand-alone software products and as integrated
product suites. We recognize revenue when the following conditions have been met:
• Persuasive evidence of an arrangement exists
• Delivery has occurred or services have been rendered
• Collection of a fixed or determinable amount is considered probable
If we determine that any one of the three criteria is not met, we will defer recognition of revenue until all the
criteria are met.
We derive revenue primarily from sales of content, subscriptions, and maintenance and licenses. We present
revenue net of sales taxes and any similar assessments.
Content, subscriptions, and maintenance revenue includes arrangements for software maintenance and
technical support for our products, content and subscription services primarily related to our security products,
revenue from arrangements where vendor-specific objective evidence, or VSOE, of the fair value of undelivered
elements does not exist, and managed security services. These arrangements are generally offered to our customers
over a specified period of time and we recognize the related revenue ratably over the maintenance, subscription, or
service period.
Content, subscriptions, and maintenance revenue also includes professional services revenue, which consists
primarily of the fees we earn related to consulting and educational services. We generally recognize revenue from
professional services as the services are performed or upon written acceptance from customers, if applicable,
assuming all other conditions for revenue recognition noted above have been met.
License revenue is derived primarily from the licensing of our various products and technology. We generally
recognize license revenue upon delivery of the product, assuming all other conditions for revenue recognition noted
above have been met.
We enter into perpetual software license agreements through direct sales to customers and indirect sales with
distributors and resellers. The license agreements generally include product maintenance agreements, for which the
related revenue is included with Content, subscriptions, and maintenance and is deferred and recognized ratably
over the period of the agreements.
In arrangements that include multiple elements, including perpetual software licenses and maintenance and/or
services and packaged products with content updates, we allocate and defer revenue for the undelivered items based
on VSOE of fair value of the undelivered elements, and recognize the difference between the total arrangement fee
and the amount deferred for the undelivered items as license revenue. VSOE of each element is based on the price
for which the undelivered element is sold separately. We determine fair value of the undelivered elements based on
historical evidence of our stand-alone sales of these elements to third parties or from the stated renewal rate for the
undelivered elements. When VSOE does not exist for undelivered items such as maintenance, the entire
arrangement fee is recognized ratably over the performance period. Our deferred revenue consists primarily of
the unamortized balance of enterprise product maintenance and consumer product content update subscriptions and
arrangements where VSOE does not exist.
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