Dell 2003 Annual Report Download - page 43

Table of Contents
reflect the issuance of EITF 00-21, the revenue recognition principles of SAB 101 remain largely unchanged by the issuance of SAB 104, which was effective
upon issuance.
In December 2003, the FASB issued FIN 46R, a revision to FIN 46. FIN 46R clarifies some of the provisions of FIN 46 and exempts certain entities from its
requirements. Entities that have adopted FIN 46 prior to this effective date can continue to apply the provisions of FIN 46 until the effective date of FIN 46R,
which is the first quarter of fiscal 2005 for Dell. Dell adopted FIN 46 at the beginning of the third quarter of fiscal 2004, which resulted in the consolidation of
DFS. See Note 6 of "Notes to Consolidated Financial Statements." FIN 46R is not expected to have a material impact on Dell's consolidated results of
operations or financial position.
Reclassifications — Certain prior year amounts have been reclassified to conform to the fiscal 2004 presentation.
NOTE 2 — Financial Instruments
Disclosures About Fair Values of Financial Instruments
The fair value of investments, long-term debt, and related interest rate derivative instruments has been estimated based upon market quotes from brokers. The
fair value of foreign currency forward contracts has been estimated using market quoted rates of foreign currencies at the applicable balance sheet date. The
estimated fair value of foreign currency purchased option contracts is based on market quoted rates at the applicable balance sheet date and the Black-Scholes
option pricing model. The estimates presented herein are not necessarily indicative of the amounts that Dell could realize in a current market exchange.
Changes in assumptions could significantly affect the estimates.
Cash and cash equivalents, accounts receivable, accounts payable, and accrued and other liabilities are reflected in the accompanying consolidated financial
statements at cost, which approximates fair value because of the short-term maturity of these instruments.
Investments
The following table summarizes by major security type the fair market value and cost of Dell's investments. All investments with remaining maturities in
excess of one year are recorded as long-term investments in the accompanying consolidated statement of financial position.
January 30, 2004 January 31, 2003
Fair Fair
Market Unrealized Market Unrealized
Value Cost Gain Value Cost Gain (Loss)
(in millions)
Debt securities:
U.S. government and agencies $ 5,115 $ 5,108 $ 7 $ 3,507 $ 3,474 $ 33
U.S. corporate 2,175 2,169 6 1,739 1,705 34
International corporate 159 159 — 151 146 5
State and municipal governments 5 5 — 45 45 —
Total debt securities 7,454 7,441 13 5,442 5,370 72
Equity securities 151 138 13 231 232 (1)
Total investments $ 7,605 $ 7,579 $ 26 $ 5,673 $ 5,602 $ 71
Short-term $ 835 $ 835 $ — $ 406 $ 402 $ 4
Long-term 6,770 6,744 26 5,267 5,200 67
Total investments $ 7,605 $ 7,579 $ 26 $ 5,673 $ 5,602 $ 71
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