Adaptec 2001 Annual Report Download - page 60

Download and view the complete annual report

Please find page 60 of the 2001 Adaptec annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 93

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93

60
certain identifiable intangible assets to be disposed of are reported at the lower of carrying
value or fair value.
Accrued liabilities. The components of accrued liabilities are as follows:
Foreign currency translation. For all foreign operations, the U.S. dollar is the functional currency.
Assets and liabilities in foreign currencies are translated into U.S. dollars using the exchange
rate at the balance sheet date. Revenues and expenses are translated at average rates of
exchange during the year. Gains and losses from foreign currency transactions are included in
Interest and other income, net.
Fair value of financial instruments. The estimated fair value amounts have been determined by
the Company using available market information and appropriate valuation methodologies.
However, considerable judgment is required in interpreting market data to develop the
estimates of fair value. A ccordingly, the estimates presented herein are not necessarily
indicative of the amounts that the Company could realize in a current market exchange.
The Company’s carrying value of accounts receivable, accounts payable and other accrued
liabilities approximates fair value because of their short maturities.
The fair value of the Company’s cash equivalents, short-term investments, and investment in
bonds and notes are determined using estimated market prices provided for those securities
(see Note 4). The fair value of investments in public companies is determined using quoted
market prices for those securities. The fair value of investments in non-public entities and the
fair value of the deposits for wafer fabrication capacity are not readily determinable.
The fair value of the Company’s obligations under capital leases and long-term debt other than
the convertible subordinated notes at December 31, 2001 and 2000 approximated their carrying
value. The fair value of the convertible subordinated notes at December 31, 2001 was not
readily determinable as there was no established public trading market for the notes.
Concentrations. The Company maintains its cash, cash equivalents, short-term investments and
long-term investments in investment grade financial instruments with high-quality financial
institutions, thereby reducing credit risk concentrations.
At December 31, 2001, approximately 20% (2000 - 26%) of accounts receivable represented
amounts due from one of the Company’s distributors. The Company believes that this
concentration and the concentration of credit risk resulting from trade receivables owing from
high-technology industry customers is substantially mitigated by the Company's credit
evaluation process, relatively short collection terms and the geographical dispersion of the
(in thousands) 2001 2000
Accrued compensation and benefits 21,193$ 19,600$
Other accrued liabilities 28,155 20,124
49,348$ 39,724$
December 31,