Symantec 2008 Annual Report Download - page 156

the value of the rebate. We estimate and record reserves for channel and end-user rebates as an offset to revenue. For
consumer products that include content updates, rebates are recorded as a ratable offset to revenue over the term of
the subscription.
Cash Equivalents and Short-Term Investments
We classify our cash equivalents and short-term investments in accordance with Statement of Financial
Accounting Standards, or 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.
Our short-term investments consist of marketable debt or equity securities with original maturities in excess of
90 days and are classified as available-for-sale. Our cash equivalents and short-term investment portfolios consist
primarily of money market funds, commercial paper, and other investments. 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.
Trade Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and are not interest bearing. We maintain an
allowance for doubtful accounts to reserve for potentially uncollectible trade receivables. Additions to the
allowance for doubtful accounts are recorded as General and administrative expenses. We review our trade
receivables by aging category to identify specific customers with known disputes or collectibility issues. In
addition, we maintain an allowance for all other receivables not included in the specific reserve by applying specific
percentages of projected uncollectible receivables to the various aging categories. In determining these percentages,
we analyze our historical collection experience and current economic trends. We exercise judgment when
determining the adequacy of these reserves as we evaluate historical bad debt trends, general economic conditions
in the U.S. and internationally, and changes in customer financial conditions. We also offset deferred revenue
against accounts receivable when channel inventories are in excess of specified levels and for transactions where
collection of a receivable is not considered probable.
Equity Investments
We have equity investments in privately held companies for business and strategic purposes. We account for
non-marketable equity securities and other investments under the cost method or, if we have the ability to exert
significant influence over the investee, utilizing the equity method. Cost method investments are included in Other
long-term assets in the Consolidated Balance Sheets. Under the cost method, the investment is recorded at its initial
cost and is periodically evaluated for impairment. During our review for impairment, we examine the investees’
actual and forecasted operating results, financial position, and liquidity, as well as business/industry factors in
assessing whether a decline in value of an equity investment has occurred that is other-than-temporary. When such a
decline in value is identified, the fair value of the equity investment is estimated based on the preceding factors and
an impairment loss is recognized in Other income (expense), net in the Consolidated Statements of Income. In fiscal
2008, 2007, and 2006, we recognized impairment losses on our cost method equity investments of $1 million,
$3 million, and $4 million, respectively. We account for the Huawei-Symantec joint venture under the equity
method. This investment is included in Investment in joint venture in the Consolidated Balance Sheets. Under the
equity method, we record our proportionate share of the joint venture’s net income or loss, based on the quarterly
financial statements of the joint venture. See Note 5 for further details.
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)