Symantec 2012 Annual Report Download - page 150

SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)
Short-term investments. Short-term investments primarily consist of marketable debt securities that are
classified as held-to-maturity and recognized at amortized cost. Such securities have contractual maturity dates of
one year or less.
Equity investments. We make equity investments in privately held companies whose businesses are
complementary to our business. These investments are accounted for under the cost method of accounting, as we
hold less than 20% of the voting stock outstanding and do not exert significant influence over these companies.
The investments are included in Other long-term assets. We assess the recoverability of these investments by
reviewing various indicators of impairment and determine the fair value of these investments by performing a
discounted cash flow analysis of estimated future cash flows if there are indicators of impairment. If a decline in
value is determined to be other-than-temporary, impairment would be recognized and included in Other
(expense) income, net. As of March 30, 2012 and April 1, 2011, we held equity investments in privately-held
companies of $40 million and $30 million, respectively. Other-than-temporary impairments related to these
investments were not material for the periods presented.
Long term debt. Long-term debt includes senior notes, convertible senior notes and a revolving credit
facility.Our senior notes and convertible senior notes are recorded at cost based upon par value at issuance less
discounts. The discount associated with our senior notes represents the amount by which the face value exceeds
the issuance price. For the convertible senior notes, the liability component is recognized at fair value on the
issuance date, based on the fair value of a similar instrument that does not have a conversion feature at issuance.
The equity component (also known as “discount”) is the excess of the principal amount of the convertible senior
notes over the fair value of the liability component and represents the estimated fair value of the conversion
feature. Such amount is reflected in Additional paid-in capital. The discount and issuance costs (recognized
initially in the Other long-term assets) are amortized using the effective interest rate method over the term of the
debt as a non-cash charge to interest expense. Borrowings under our $1 billion senior unsecured revolving credit
facility are recognized at cost plus accrued interest based upon stated interest rates.
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 collectability 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.
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