Blizzard 2015 Annual Report Download - page 44

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Financial Disclosure
We maintain internal control over financial reporting, which generally includes those controls relating to the preparation of our
financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). We
also are focused on our “disclosure controls and procedures,” which as defined by the Securities and Exchange Commission (the
“SEC”), are generally those controls and procedures designed to ensure that financial and non-financial information required to be
disclosed in our reports filed with the SEC is reported within the time periods specified in the SEC’s rules and forms, and that such
information is communicated to management, including our principal executive and financial officers, as appropriate, to allow timely
decisions regarding required disclosure.
Our Disclosure Committee, which operates under the Board of Directors approved Disclosure Committee Charter and Disclosure
Controls & Procedures Policy, includes senior management representatives and assists executive management in its oversight of the
accuracy and timeliness of our disclosures, as well as in implementing and evaluating our overall disclosure process. As part of our
disclosure process, senior finance and operational representatives from all of our corporate divisions and business units prepare
quarterly reports regarding their current-quarter operational performance, future trends, subsequent events, internal controls, changes
in internal controls and other accounting and disclosure relevant information. These quarterly reports are reviewed by certain key
corporate finance executives. These corporate finance representatives also conduct quarterly interviews on a rotating basis with the
preparers of selected quarterly reports. The results of the quarterly reports and related interviews are reviewed by the Disclosure
Committee. Finance representatives also conduct interviews with our senior management team, our legal counsel and other
appropriate personnel involved in the disclosure process, as appropriate. Additionally, senior finance and operational representatives
provide internal certifications regarding the accuracy of information they provide that is utilized in the preparation of our periodic
public reports filed with the SEC. Financial results and other financial information also are reviewed with the Audit Committee of the
Board of Directors on a quarterly basis. As required by applicable regulatory requirements, the principal executive and financial
officers review and make various certifications regarding the accuracy of our periodic public reports filed with the SEC, our disclosure
controls and procedures, and our internal control over financial reporting. With the assistance of the Disclosure Committee, we will
continue to assess and monitor, and make refinements to, our disclosure controls and procedures, and our internal control over
financial reporting.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates and assumptions. The impact and any associated
risks related to these policies on our business operations are discussed throughout Management’s Discussion and Analysis of Financial
Condition and Results of Operations where such policies affect our reported and expected financial results. The estimates and
assumptions discussed below are considered by management to be critical because they are both important to the portrayal of our
financial condition and results of operations and because their application places the most significant demands on management’s
judgment, with financial reporting results relying on estimates and assumptions about the effect of matters that are inherently
uncertain. Specific risks for these critical accounting estimates and assumptions are described in the following paragraphs.
Revenue Recognition including Revenue Arrangements with Multiple Deliverables
We recognize revenues when there is persuasive evidence of an arrangement, the product or service has been provided to the
customer, the collection of our fees is reasonably assured, and the amount of fees to be paid by the customer is fixed or determinable.
Certain products are sold to customers with a “street date” (which is the earliest date these products may be sold by retailers). For
these products, we recognize revenues on the later of the street date or the date the product is sold to the customer.
Certain of our revenue arrangements have multiple deliverables, which we account for in accordance with Accounting Standards
Codification (“ASC”) Topic 605 and Accounting Standards Update (“ASU”) 2009-13. These revenue arrangements include product
sales consisting of both software and hardware deliverables (such as peripherals or other ancillary collectors’ items sold together with
physical “boxed” software) and our sales of World of Warcraft boxed products, expansion packs and value-added services, each of
which is considered with the related subscription services for these purposes.
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