Symantec 2008 Annual Report Download - page 115

used when we determine that the carrying value of the long-lived assets may not be recoverable. Based upon the
existence of one or more indicators of impairment, we measure any impairment of long-lived assets based on a
projected undiscounted cash flow method using assumptions determined by our management to be commensurate
with the risk inherent in our current business model. Our estimates of cash flows require significant judgment based
on our historical results and anticipated results and are subject to many triggering factors which could change and
cause a material impact to our operating results or financial condition. During fiscal 2008, we recorded an
impairment charge of $1 million for our Newport News, VA building held for sale.
Acquired Product Rights. We account for acquired product rights in accordance with SFAS No. 86,
“Accounting for Costs of Computer Software to be Sold, Leased or Otherwise Marketed”. We record impairment
charges on acquired product rights when we determine that the net realizable value of the assets may not be
recoverable. To determine the net realizable value of the assets, we use the estimated future gross revenues from
each product. Our estimated future gross revenues of each product are based on company forecasts and are subject
to change. During fiscal 2008, we did not have any indications of impairment.
Restructuring
We have estimated expenses for excess facilities related to consolidating, moving, and relocating personnel or
sites as a result of restructuring activities and business acquisitions. In determining our estimates, we obtain
information from third-party leasing agents to calculate anticipated third-party sublease income and the vacancy
period prior to finding a sublessee. Market conditions may affect our ability to sublease facilities on terms consistent
with our estimates. Our ability to sublease facilities on schedule or to negotiate lease terms resulting in higher or
lower sublease income than estimated may affect our accrual for site closures. In addition, differences between
estimated and actual related broker commissions, tenant improvements, and other exit costs may increase or
decrease our accrual upon final negotiation. If we made different estimates regarding these various components of
our excess facilities costs, the amount recorded for any new period presented could vary materially from those
actually recorded.
Stock-based Compensation
Effective April 1, 2006, we adopted the provisions of, and accounted for stock-based compensation in
accordance with, SFAS No. 123R. Under SFAS No. 123R, we must measure the fair value of all stock-based awards,
including stock options, restricted stock units, or RSUs, and purchase rights under our employee stock purchase
plan, or ESPP, on the date of grant and amortize the fair value of the award over the requisite service period. We
elected the modified prospective application method, under which prior periods are not revised for comparative
purposes. The valuation provisions of SFAS No. 123R apply to new awards and to awards that were outstanding as
of the effective date and are subsequently modified. For stock-based awards granted on or after April 1, 2006, we
recognize stock-based compensation expense on a straight-line basis over the requisite service period, which is
generally the vesting period. We also recognize estimated compensation expense for the unvested portion of awards
that were outstanding as of the effective date on a straight-line basis over the remaining service period using the
compensation costs estimated for the SFAS No. 123 pro forma disclosures.
We currently use the Black-Scholes option-pricing model to determine the fair value of stock options. The
determination of the fair value of stock-based awards on the date of grant using an option-pricing model is affected
by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables
include our expected stock price volatility over the term of the awards, actual and projected employee stock option
exercise and cancellation behaviors, risk-free interest rates, and expected dividends.
We estimate the expected life of options granted based on an analysis of our historical experience of employee
exercise and post-vesting termination behavior considered in relation to the contractual life of the option. Expected
volatility is based on the average of historical volatility for the period commensurate with the expected life of the
option and the implied volatility of traded options. The risk free interest rate is equal to the U.S. Treasury constant
maturity rates for the period equal to the expected life. We do not currently pay cash dividends on our common stock
and do not anticipate doing so in the foreseeable future. Accordingly, our expected dividend yield is zero. We are
required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual
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