Adobe 2000 Annual Report Download - page 43

various modifications to the terms of a previously fixed stock option or award, and (d) the
accounting for an exchange of stock compensation awards in a business combination.
FIN 44 was effective July 1, 2000, except for the provisions that relate to modifications that
directly or indirectly reduce the exercise price of an award and the definition of an
employee, which were effective after December 15, 1998. The adoption of FIN 44 did not
have a material impact on our financial position or results of operations.
In March 2000, the Emerging Issues Task Force (the “EITF”) published its consensus on
Issue No. 00-2, “Accounting for Web Sit e Development Costs,” which requires that costs
incurred during the development of Web site applications and infrastructure, involving
developing software to operate the Web site, including graphics that affect the “look and
feel” of the Web page and all costs relating to software used to operate a Web site, should
be accounted for under Statement of Position 98-1 (“SOP 98-1”), “Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use.” However, if a plan
exists or is being developed to market the software externally, the costs relating to the
software should be accounted for pursuant to Statement of Financial Accounting
Standards No. 86 (“SFAS 86”), “Accounting for the Costs of Computer Software to Be
Sold, Leased, or Otherwise Marketed.” We adopted Issue No. 00-2 in our fourth quarter of
fiscal 2000. The adoption of Issue No. 00-2 did not have a material impact on our financial
position or results of operations.
In March 2000, the EITF reached a consensus on Issue No. 00-3, “Application of AICPA
Statement of Position 97-2, Software Revenue Recognition to Arrangements That
Include the Right to Use Software Stored on Another Entity’s Hardware.” The Issue
states that a software element covered by Statement of Position 97-2 (“SOP 97-2”) is
only present in a hosting arrangement if the customer has the contractual right to take
possession of the software at any time during the hosting period without significant
penalty and it is feasible for the customer to either run the software on its own hardware
or contract with another party unrelated to the vendor to host the software. We do not
expect the adoption of Issue No. 00-3 to have a material impact on our financial
position or results of operations.
In March 2000, the EITF reached a consensus on Issue No. 00-8, “Accounting by a
Grantee for an Equity Instrument to Be Received in Conjunction with Providing Goods
or Services.” Issue No. 00-8 addresses the date to be used by the grantee to measure the
fair value of those equity instruments for revenue recognition purposes for transactions
in which an entity provides goods or services in exchange for equity instruments. In addi-
tion, it addresses how the grantee should account for an increase in fair value as a result
of an adjustment as revenue for transactions in which any of the terms of the equity
instruments are subject to adjustment after the measurement date. Issue No. 00-8 applies
to all grants and to modifications of existing grants that occur after March 16, 2000. The
adoption of Issue No. 00-8 did not have a material impact on our financial position or
results of operations.
In May 2000, the EITF reached a consensus on Issue No. 00-14, “Accounting for Coupons,
Rebates, and Discounts.” Issue No. 00-14 addresses the recognition, measurement, and
income statement classification for sales incentives offered voluntarily by a vendor
without charge to customers that can be used in, or that are exercisable by a customer
as a result of, a single exchange transaction. We adopted Issue No. 00-14 beginning
December 2, 2000. The adoption of Issue No. 00-14 did not have a material impact on our
financial position or results of operations.