Symantec 2010 Annual Report Download - page 140

fiscal 2010 and 2008, respectively. We had a foreign currency transaction gain in fiscal 2009 of $11 million.
Deferred tax assets (liabilities) are established on the cumulative translation adjustment attributable to unremitted
foreign earnings that are not intended to be indefinitely reinvested.
Revenue Recognition
We market and distribute our software products both as stand-alone products and as integrated product suites.
We recognize revenue when 1) persuasive evidence of an arrangement exists, 2) delivery has occurred or services
have been rendered, 3) fees are fixed or determinable and 4) collectability is probable. If we determine that any one
of the four criteria is not met, we will defer recognition of revenue until all the criteria are met.
We derive revenue primarily from sales of content, subscriptions, and maintenance and licenses. We present
revenue net of sales taxes and any similar assessments.
Content, subscriptions, and maintenance revenue includes arrangements for software maintenance and
technical support for our products, content and subscription services primarily related to our security products,
revenue from arrangements where vendor-specific objective evidence (“VSOE”) of the fair value of undelivered
elements does not exist, arrangements for managed security services, and Software-as-a-Service (“SaaS”) offer-
ings. These arrangements are generally offered to our customers over a specified period of time, and we recognize
the related revenue ratably over the maintenance, subscription, or service period.
Content, subscriptions, and maintenance revenue also includes professional services revenue, which consists
primarily of the fees we earn related to consulting and educational services. We generally recognize revenue from
professional services as the services are performed or upon written acceptance from customers, if applicable,
assuming all other conditions for revenue recognition noted above have been met.
License revenue is derived primarily from the licensing of our various products and technology. We generally
recognize license revenue upon delivery of the product, assuming all other conditions for revenue recognition noted
above have been met.
We enter into perpetual software license agreements through direct sales to customers and indirect sales with
distributors and resellers. The license agreements generally include product maintenance agreements, for which the
related revenue is included with Content, subscriptions, and maintenance and is deferred and recognized ratably
over the period of the agreements.
For arrangements that include multiple elements, including perpetual software licenses, maintenance, ser-
vices, and packaged products with content updates, managed security services, and subscriptions, we allocate and
defer revenue for the undelivered items based on VSOE of the fair value of the undelivered elements, and recognize
the difference between the total arrangement fee and the amount deferred for the undelivered items as license
revenue. VSOE of each element is based on historical evidence of our stand-alone sales of these elements to third
parties or from the stated renewal rate for the undelivered elements. When VSOE does not exist for undelivered
items, the entire arrangement fee is recognized ratably over the performance period. Our deferred revenue consists
primarily of the unamortized balance of enterprise product maintenance, consumer product content update
subscriptions, and arrangements where VSOE does not exist for an undelivered element.
For arrangements that include both software and non-software elements that are within the scope of the newly
adopted accounting standards, further described below under “Recently Adopted Authoritative Guidance”, we
allocate revenue to the software deliverables as a group and non-software deliverables based on their relative selling
prices. In such circumstances, the new accounting principles establish a hierarchy to determine the selling price
used for allocating revenue to the deliverables as follows: (i) VSOE, (ii) third-party evidence of selling price
(“TPE”) and (iii) best estimate of the selling price (“ESP”). Our appliance products, SaaS and certain other services
are considered to be non-software elements in our arrangements.
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)