Symantec 2009 Annual Report Download - page 133

In May 2008, the FASB issued FSPAPB No. 14-1, Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash Settlement). The FSP will require the issuer of convertible
debt instruments with cash settlement features to separately account for the liability and equity components of the
instrument. The debt will be recognized at the present value of its cash flows discounted using the issuer’s
nonconvertible debt borrowing rate at the time of issuance. The equity component will be recognized as the
difference between the proceeds from the issuance of the note and the fair value of the liability. The FSP will also
require interest to be accreted as interest expense of the resultant debt discount over the expected life of the debt.
The transition guidance requires retrospective application to all periods presented, and does not grandfather existing
instruments. The guidance will be effective for fiscal years beginning after December 15, 2008, and interim periods
within those years. As such, we will adopt the FSP in the first quarter of fiscal year 2010. Our 0.75% Convertible
Senior Notes due June 15, 2011, and our 1.00% Convertible Senior Notes due June 15, 2013 (collectively the
“Senior Notes”), each issued in June 2006, are subject to the FSP.
Upon adoption, we will record a debt discount, which will be amortized to interest expense through maturity of
the Senior Notes. Although we have not completed our evaluation of the impact of adoption, we expect to
retrospectively adjust the original carrying amount of the Senior Notes as of June 2006 to reflect a discount of
approximately $586 million on the date of issuance, with an offsetting increase in additional paid-in capital of
approximately $354 million and a decrease in deferred tax assets of approximately $232 million. Excluding the
corresponding impact of income taxes, we expect to retrospectively record an increase in non-cash interest expense
of approximately $91 million in fiscal 2008 and approximately $97 million in fiscal 2009. As a result of applying
the FSP, we also expect non-cash interest expense in fiscal 2010 to increase by approximately $104 million,
excluding the corresponding impact of income taxes. The additional non-cash interest expense will have no impact
on the total operating, investing and financing cash flows in prior periods or in future consolidated statements of
cash flows. If future interpretations of, or changes to, the FSP necessitate a further change in these reporting
practices, our previously reported and future results of operations could be adversely affected.
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles.
SFAS No. 162 defines the order in which accounting principles that are generally accepted should be followed.
SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight
Board (“PCAOB”) amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles. We do not expect the adoption of SFAS No. 162 to have a material impact on our
consolidated financial statements.
In April 2008, the FASB finalized FSP No. 142-3, Determination of the Useful Life of Intangible Assets. The
position amends the factors that should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under FASB SFAS No. 142. The position applies to
intangible assets that are acquired individually or with a group of other assets and both intangible assets acquired in
business combinations and asset acquisitions. FSP 142-3 is effective for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. We are currently evaluating the impact of the pending adoption
of FSP 142-3 on our consolidated financial statements.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements —an amendment of ARB No. 51. The standard changes the accounting for noncontrolling (minority)
interests in consolidated financial statements including the requirements to classify noncontrolling interests as a
component of consolidated stockholders’ equity, to identify earnings attributable to noncontrolling interests
reported as part of consolidated earnings, and to measure gain or loss on the deconsolidated subsidiary using
the fair value of the noncontrolling equity investment. Additionally, SFAS No. 160 revises the accounting for both
increases and decreases in a parent’s controlling ownership interest. SFAS No. 160 is effective for fiscal years
beginning after December 15, 2008, with early adoption prohibited. We do not expect the adoption of SFAS No. 160
to have a material impact on our consolidated financial statements.
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)