Symantec 2016 Annual Report Download - page 149

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.
Debt. Our debt includes senior unsecured notes, convertible senior notes, and a revolving credit facility. Our
senior unsecured 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 fair value of the debt at the date of issuance. The discount and issuance costs 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 senior unsecured revolving credit facility (“credit facility”), if any, are recognized at cost plus accrued
interest based upon stated interest rates.
Equity investments. We make equity investments in privately-held companies, which includes the B
common shares we received as a portion of the net consideration in the sale of Veritas. 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. We assess the recoverability of these investments by
reviewing various indicators of impairment. If indicators are present, a fair value measurement is made by
performing a discounted cash flow analysis of the investment. If a decline in value is determined to be other-
than-temporary, impairment would be recognized and included in other income, net.
Accounts receivable
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 receivables. We review our accounts
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 use judgment based on our historical collection experience and current economic trends. 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.
Property and equipment
Property, equipment, and leasehold improvements are stated at cost, net of accumulated depreciation. We
capitalize costs incurred during the application development stage related to the development of internal use
software and enterprise cloud computing services. We expense costs incurred related to the planning and post-
implementation phases of development as incurred. Depreciation is provided on a straight-line basis over the
estimated useful lives. Estimated useful lives for financial reporting purposes are as follows: buildings, 20 to
30 years; leasehold improvements, the lesser of the life of the improvement or the initial lease term; computer
hardware and software, and office furniture and equipment, 3 to 5 years.
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