Symantec 2008 Annual Report Download - page 136

In February 2007, the 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. In February 2008, the FASB issued FSP
No. FAS 157-1, Application of SFAS No. 157 to SFAS No. 13 and Other Accounting Pronouncements That Address
Fair Value Measurements for Purposes of Lease Classification or Measurement under SFAS No. 13 and FSP
No. FAS 157-2, Effective Date of SFAS No. 157. Collectively, the Staff Positions defer the effective date of
SFAS No. 157 to fiscal years beginning after December 15, 2008, for nonfinancial assets and nonfinancial liabilities
except for items that are recognized or disclosed at fair value on a recurring basis at least annually, and amend the
scope of SFAS 157. We are currently evaluating the impact of the pending adoption of SFAS 157 on our
consolidated financial statements.
In September 2006, the FASB issued Emerging Issues Task Force (“EITF”) Issue 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 Issue No. 06-1 requires that we provide disclosures
regarding the nature of arrangements in which we provide consideration to manufacturers or resellers of equipment
necessary for an end-customer to receive service from us, including the amounts recognized in the Consolidated
Statements of Income. EITF Issue No. 06-1 is effective for fiscal years beginning after June 15, 2007. We do not
expect the adoption of EITF Issue No. 06-1 to have a material impact on our consolidated financial statements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to various market risks related to fluctuations in interest rates, foreign currency exchange rates,
and equity prices. We may use derivative financial instruments to mitigate certain risks in accordance with our
investment and foreign exchange policies. We do not use derivatives or other financial instruments for trading or
speculative purposes.
Interest Rate Risk
Our exposure to interest rate risk relates primarily to our short-term investment portfolio and the potential
losses arising from changes in interest rates. Our investment objective is to achieve the maximum return compatible
with capital preservation and our liquidity requirements. Our strategy is to invest our cash in a manner that preserves
capital, maintains sufficient liquidity to meet the cash requirements of the company, maximizes yields consistent
with approved credit risk, and limits inappropriate concentrations of investment by sector, credit, or issuer. We
classify our cash equivalents and short-term investments in accordance with SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities. We consider investments in instruments purchased with an original
maturity of 90 days or less to be cash equivalents. We classify our short-term investments as available-for-sale, and
short-term investments consist of marketable debt or equity securities with original maturities in excess of 90 days.
Our cash equivalents and short-term investment portfolios consist primarily of money market funds, commercial
paper, corporate debt securities, and U.S. government and government-sponsored debt securities. Our short-term
investments do not include equity investments in privately held companies. Our short-term investments are reported
at fair value with unrealized gains and losses, net of tax, included in Accumulated other comprehensive income
within Stockholders’ equity in the Consolidated Balance Sheets. The amortization of premiums and discounts on
the investments, realized gains and losses, and declines in value judged to be other-than-temporary on available-for-
sale securities are included in Other income (expense), net in the Consolidated Statements of Income. We use the
specific identification method to determine cost in calculating realized gains and losses upon sale of short-term
investments.
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