McKesson 2009 Annual Report Download - page 74

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McKESSON CORPORATION
FINANCIAL NOTES
68
1. Significant Accounting Policies
McKesson Corporation (“McKesson,” the “Company,” or “we” and other similar pronouns) is a corporation
providing supply, information and care management products and services designed to reduce costs and improve
quality across the healthcare industry.
Basis of Presentation: The consolidated financial statements of McKesson include the financial statements of
all wholly-owned subsidiaries, majority-owned or controlled companies and certain immaterial variable interest
entities (“VIEs”) of which we are the primary beneficiary. Significant intercompany transactions and balances have
been eliminated. The Company’s fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all
references to a particular year shall mean the Company’s fiscal year.
We conduct our business through two segments, Distribution Solutions and Technology Solutions as further
described in Financial Note 22, “Segments of Business.”
Reclassifications: Certain prior year amounts have been reclassified to conform to the current year
presentation.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America (“GAAP”) requires that we make estimates and assumptions that affect the
reported amounts in the consolidated financial statements and accompanying notes. Actual amounts could differ
from those estimated amounts.
Cash and Cash Equivalents: All highly liquid debt instruments purchased with a maturity of three months or
less at the date of acquisition are included in cash and cash equivalents. Included in cash and cash equivalents at
March 31, 2009, are money market fund investments of $1.7 billion which are reported at fair value. The fair value
of these investments was determined by using quoted prices for identical investments in active markets which are
considered to be Level 1 inputs under Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value
Measurements.” The carrying value of all other cash equivalents approximates fair value due to their relatively
short-term nature.
We maintain cash and cash equivalents with several financial institutions. Bank deposits may exceed the
amount of federal deposit insurance. Cash equivalents may be invested in money market funds. We mitigate the
risk of our short-term investment portfolio by investing the majority of funds in U.S. government securities,
depositing funds with reputable financial institutions and monitoring risk profiles and investment strategies of
money market funds.
Restricted Cash: Cash that is subject to legal restrictions or is unavailable for general operating purposes is
classified as restricted cash and included within prepaid expenses and other in the consolidated balance sheets.
Marketable Securities Available for Sale: We carry our marketable securities which are available for sale at fair
value and the net unrealized gains and losses, net of the related tax effect, computed in marking these securities to
market have been reported within stockholders’ equity. At March 31, 2009 and 2008, marketable securities were
not material.