Symantec 2008 Annual Report Download - page 158

Goodwill and Other Intangible Assets
We account for goodwill and other intangible assets in accordance with SFAS No. 142, Goodwill and Other
Intangible Assets. SFAS No. 142 requires that goodwill and identifiable intangible assets with indefinite useful lives
be tested for impairment at least annually, or more frequently if events and circumstances warrant. We evaluate
goodwill for impairment by comparing the fair value of each of our reporting units, which are the same as our
operating segments, to its carrying value, including the goodwill allocated to that reporting unit. To determine the
reporting units’ fair values in the current year evaluation, we used the income approach under which we calculated
the fair value of each reporting unit based on the estimated discounted future cash flows of that unit. Our cash flow
assumptions are based on historical and forecasted revenue, operating costs, and other relevant factors.
SFAS No. 142 also requires that intangible assets with finite useful lives be amortized over their respective
estimated useful lives and reviewed for impairment in accordance with SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets.
Long-Lived Assets
We account for long-lived assets in accordance with SFAS No. 144, which requires that long-lived and
intangible assets subject to amortization, including Property and equipment, net, and Other intangible assets, net, be
evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. We would recognize an impairment loss if the sum of the undiscounted future net cash
flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Such
impairment loss would be measured as the difference between the carrying amount of the asset and its fair value,
which would be estimated based on the discounted cash flows expected to be generated by the asset. Assets to be
disposed of would be separately presented in the Consolidated Balance Sheets, reported at the lower of the carrying
amount or fair value less costs to sell, and no longer depreciated. The disposal group classified as held for sale would
be presented in the Other current assets account on the Consolidated Balance Sheets.
Income Taxes
We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. The provision
for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are
recognized for the expected future tax consequences of temporary differences between the financial reporting and
tax bases of assets and liabilities, and for operating loss and tax credit carryforwards in each jurisdiction in which we
operate. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable
income in effect for the years in which those tax assets are expected to be realized or settled. We record a valuation
allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
We are required to compute our income taxes in each federal, state, and international jurisdiction in which we
operate. This process requires that we estimate the current tax exposure as well as assess temporary differences
between the accounting and tax treatment of assets and liabilities, including items such as accruals and allowances
not currently deductible for tax purposes. The income tax effects of the differences we identify are classified as
current or long-term deferred tax assets and liabilities in our Consolidated Balance Sheets. Our judgments,
assumptions, and estimates relative to the current provision for income tax take into account current tax laws, our
interpretation of current tax laws, and possible outcomes of current and future audits conducted by foreign and
domestic tax authorities. Changes in tax laws or our interpretation of tax laws and the resolution of current and
future tax audits could significantly impact the amounts provided for income taxes in our Consolidated Balance
Sheets and Consolidated Statements of Income. We must also assess the likelihood that deferred tax assets will be
realized from future taxable income and, based on this assessment, establish a valuation allowance, if required. Our
determination of our valuation allowance is based upon a number of assumptions, judgments, and estimates,
including forecasted earnings, future taxable income, and the relative proportions of revenue and income before
taxes in the various domestic and international jurisdictions in which we operate. To the extent we establish a
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)