Symantec 2007 Annual Report Download - page 87

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(5)
Prior to April 1, 2006, computer hardware, office furniture, and equipment purchases below $5,000 were
recognized as period expenses. Effective April 1, 2006, we capitalize all qualifying computer hardware, office
furniture, and equipment purchases.
(6)
Prior to April 1, 2006, for our Consumer product line, we amortized capitalized cost of revenues on a monthly
straight-line basis, commencing with the month in which the related subscription revenue term began.
Effective April 1, 2006, we amortize capitalized cost of revenues on a daily straight-line basis, commencing on
the day the related subscription revenue term begins.
(7)
Prior to April 1, 2006, we recorded an accrual related to a promotion that provided 90 days free technical
support for customers purchasing our Consumer products. This program expired in July 2000. Upon
expiration of the program, we erroneously maintained the accrual.
(8)
Prior to April 1, 2006, we recorded an accrual related to employee distributed benefits such as costs associated
with bonuses, 401(k) matching, and other fringe benefits, utilizing an estimated overhead rate. Prior to fiscal
2004, it was determined that $3 million of our accrued expense was no longer required; however, we
erroneously maintained the accrual.
(9)
Prior to April 1, 2006, we recorded a general reserve associated with accounts receivable balances. Prior to
fiscal 2004, it was determined that this general reserve was not substantiated and we erroneously maintained
the reserve.
(10)
As a result of the misstatements previously described, we recorded an increase to Deferred income tax in the
amount of $9 million as of April 1, 2006 with a corresponding increase to Retained earnings to correct these
misstatements.
(11)
Represents the net reduction to Retained earnings recorded as of April 1, 2006 to reflect the initial application
of SAB No. 108.
Certain of the adjustments ((2) through (6) and (10)) included above also resulted in errors in the first three
quarters of fiscal 2007. In conjunction with our adoption of SAB No. 108 in the fourth quarter, we noted certain
other misstatements, the correction of which only impacted fiscal 2007. We previously evaluated these misstate-
ments utilizing the rollover approach and concluded that these errors were insignificant, individually and in the
aggregate, to each of the first three quarters of fiscal 2007. Our disclosure of selected quarterly information included
in Item 8. Financial Statements and Supplementary Data has been adjusted to reflect our adoption of SAB No. 108
as of April 1, 2006.
Newly Adopted and Recently Issued Accounting Pronouncements
In February 2007, the Financial Accounting Standards Board, or FASB, issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities, including an amendment of SFAS No. 115. SFAS No. 159
permits companies to choose to measure certain financial instruments and certain other items at fair value and
requires unrealized gains and losses on items for which the fair value option has been elected to be reported in
earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We are currently in the
process of evaluating the impact of SFAS No. 159 on our consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 establishes a
framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased
consistency in how fair value determinations are made under various existing accounting standards which permit, or
in some cases require, estimates of fair market value. SFAS No. 157 is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that
the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for
an interim period within that fiscal year. We are currently in the process of evaluating the impact of SFAS No. 157
on our consolidated financial statements.
In September 2006, the FASB issued Emerging Issues Task Force Issue, or EITF, No. 06-1, Accounting for
Consideration Given by a Service Provider to a Manufacturer or Reseller of Equipment Necessary for an End-
Customer to Receive Service from the Service Provider. EITF No. 06-1 requires that we provide disclosures
regarding the nature of arrangements in which we provide consideration to manufacturers or resellers of equipment
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