Symantec 2014 Annual Report Download - page 144

in an understatement of deferred revenue that affected multiple accounting periods. We corrected the error by
(i) adjusting our April 1, 2011 stockholders’ equity balance to correct misstatements in years prior to fiscal 2012
and (ii) recognizing an adjustment in our fiscal 2014 Consolidated Statements of Income to correct misstatements
in fiscal years 2014, 2013 and 2012. The adjustment recognized in the fourth quarter of our fiscal 2014
Consolidated Statements of Income reduced revenue by $28 million and net income by $22 million. The
adjustment related to years prior to fiscal 2012 decreased stockholders’ equity by $49 million and increased long-
term deferred revenue by $67 million as of April 1, 2011. The errors were not material to the Consolidated
Statements of Income in our fiscal years 2013 and 2012 or the quarters in our fiscal year 2014. The adjustment to
correct the cumulative misstatement to stockholders’ equity was also not material as of April 1, 2011.
The following table presents the changes to financial statement line items to correct the cumulative
misstatement in our fiscal 2012 Consolidated Balance Sheet:
As of March 30, 2012
As Reported Adjustment As Adjusted
(Dollars in millions)
Long-term deferred revenue $ 529 $ 67 $ 596
Long-term deferred tax liabilities $ 288 $ (18) $ 270
Accumulated deficit (1) $ (2,859) $ 60 $ (2,799)
(1) Adjustment includes a decrease of $109 million to accumulated deficit related to change in accounting policy
for sales commissions, offset by an increase of $49 million related to the correction in deferred revenue. See sales
commissions policy below.
The misstatement did not affect our balance of cash and cash equivalents and as a result did not change net
cash flows from operating, investing, or financing activities in our Consolidated Statement of Cash Flows.
Financial instruments
For assets and liabilities measured at fair value, such amounts are based on an expected exit price
representing the amount that would be received on the sale of an asset or paid to transfer a liability, as the case
may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions
that market participants would use in pricing an asset or liability. The authoritative guidance on fair value
measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring
basis whereby inputs used in valuation techniques are assigned a hierarchical level.
The following methods were used to estimate the fair value of each class of financial instruments for which
it is practicable to estimate that value:
Cash equivalents. We consider all highly liquid investments with an original maturity of three months or
less to be cash equivalents. Cash equivalents are carried at amounts that approximate fair value due to the short
period of time to maturity.
Short-term investments. Short-term investments consist of marketable equity and investment securities that
are classified as available-for-sale and recognized at fair value using Level 1 and Level 2 inputs, which are
quoted using market prices, independent pricing vendors, or other sources, to determine the fair value.
Unrealized gains and losses, net of tax, are included in accumulated other comprehensive income. We regularly
review our investment portfolio to identify and evaluate investments that have indications of impairment. Factors
considered in determining whether a loss is other-than-temporary include: the length of time and extent to which
the fair value has been lower than the cost basis, the financial condition and near-term prospects of the investee,
credit quality, likelihood of recovery, and our ability to hold the investment for a period of time sufficient to
allow for any anticipated recovery in market value.
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