Symantec 2008 Annual Report Download - page 153

SYMANTEC CORPORATION
Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
Business
Symantec Corporation (“we,” “us,” and “our” refer to Symantec Corporation and all of its subsidiaries) is a
global leader in providing security, storage and systems management solutions to help businesses and consumers
secure and manage their information. We provide customers worldwide with software and services that protect,
manage and control information risks related to security, data protection, storage, compliance, and systems
management. We help our customers manage cost, complexity and compliance by protecting their IT infrastructure
as they seek to maximize value from their IT investments.
Principles of Consolidation
The accompanying consolidated financial statements of Symantec Corporation and its wholly-owned sub-
sidiaries are prepared in conformity with generally accepted accounting principles in the United States. All
significant intercompany accounts and transactions have been eliminated.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current presentation. As of March 30,
2007, we had $16 million of deferred compensation plan assets that were reclassified from Short term investments
to Other current assets.
Business Combinations
In fiscal 2008, we acquired Altiris Inc, a publicly-held company, and two privately-held companies. In fiscal
2007, we acquired two privately-held companies. Each of these was accounted for using the purchase method of
accounting under SFAS No. 141 Business Combinations. Each acquired company’s operating results are included in
the Company’s consolidated financial statements since the date of acquisition. The purchase price is allocated to
tangible and identifiable intangible assets acquired and liabilities assumed as of the date of acquisition. Goodwill is
recognized for the remaining unallocated purchase price.
Amounts allocated to assets are based upon fair values. Such valuations require management to make
significant estimates and assumptions, especially with respect to intangible assets. Management makes estimates of
fair value based upon assumptions believed to be reasonable. These estimates are based on historical experience and
information obtained from the management of the acquired companies and are inherently uncertain. Other
separately identifiable intangible assets generally include acquired product rights, developed technology, customer
lists and tradenames. The Company did not assume in-process research and development (“IPR&D”) in the fiscal
years 2008 and 2007. Other intangible assets are amortized over their estimated useful lives using a straight-line
method. Amortization for acquired product rights is recognized in “Cost of revenues.” Amortization for customer
lists and tradenames is recognized in “Operating expenses.”
Amounts allocated to liabilities assumed are based upon present values of amounts to be paid determined at
current market rates. The Company estimates the fair value of deferred revenue related to product support assumed
in connection with acquisitions. The estimated fair value of deferred revenue is determined by estimating the costs
related to fulfilling the obligations plus a normal profit margin. The estimated costs to fulfill the support contracts
are based on the historical direct costs related to providing the support.
For any given acquisition, we may identify certain pre-acquisition contingencies. If the contingency is
probable and can be reasonably estimated within the purchase price allocation period, generally within one year
after acquisition, an adjustment is recorded to goodwill. If the contingency is not probable or cannot be reasonably
estimated at the end of the purchase price allocation period, the adjustment is recorded in operating results in the
period in which the adjustment is determined.
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