AMD 1997 Annual Report Download - page 75

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ADVANCED MICRO DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Financial Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based
Compensation." SFAS 123 provides an alternative to APB 25 and is effective for
fiscal years beginning after December 15, 1995. As allowed under SFAS 123, the
Company continues to account for its employee stock plans in accordance with
the provisions of APB 25. See Note 12.
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results inevitably will differ from those estimates,
and such differences may be material to the financial statements.
Year-End Adjustments (Unaudited). The Company made certain year-end
adjustments in 1995, resulting from changes in estimates related to the Nx586
product which was developed by NexGen. These adjustments were material to the
results of the fourth quarter in 1995. These adjustments, related to accounts
receivable and inventory, were charged primarily to net sales and cost of
sales and reduced 1995 operating income by approximately $52 million. These
adjustments had no impact on the Company's operating results in 1997 or 1996.
Financial Presentation. Certain prior year amounts on the Consolidated
Financial Statements have been reclassified to conform to the 1997
presentation.
F-10
Source: ADVANCED MICRO DEVIC, 10-K405, March 03, 1998