NVIDIA 2011 Annual Report Download - page 69

Download and view the complete annual report

Please find page 69 of the 2011 NVIDIA 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 116

  • 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
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Comprehensive Income (Loss)
Comprehensive income (loss) consists of net income (loss) and other comprehensive income or loss. Other comprehensive income or loss components
include unrealized gains or losses on available-for-sale securities, net of tax.
Net Income (Loss) Per Share
Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net
income (loss) per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period,
using the treasury stock method. Under the treasury stock method, the effect of stock options outstanding is not included in the computation of diluted net
income (loss) per share for periods when their effect is anti-dilutive.
Cash and Cash Equivalents
We consider all highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at the time of
purchase to be cash equivalents. As of January 30, 2011 and January 31, 2010, our cash and cash equivalents were $665.4 million and $447.2 million,
respectively, which include $132.6 million and $81.4 million invested in money market funds for fiscal year 2011 and fiscal year 2010, respectively.
Marketable Securities
Marketable securities consist primarily of highly liquid investments with maturities of greater than three months when purchased. We generally
classify our marketable securities at the date of acquisition as available-for-sale. These securities are reported at fair value with the related unrealized gains
and losses included in accumulated other comprehensive income (loss), a component of stockholders’ equity, net of tax. Any unrealized losses which are
considered to be other-than-temporary impairments are recorded in the other income (expense) section of our consolidated statements of operations. Realized
gains (losses) on the sale of marketable securities are determined using the specific-identification method and recorded in the other income (expense) section
of our consolidated statements of operations.
All of our available-for-sale investments are subject to a periodic impairment review. We record a charge to earnings when a decline in fair value is
significantly below cost basis and judged to be other-than-temporary, or have other indicators of impairments. If the fair value of an available-for-sale debt
instrument is less than its amortized cost basis, an other-than-temporary impairment is triggered in circumstances where (1) we intend to sell the instrument,
(2) it is more likely than not that we will be required to sell the instrument before recovery of its amortized cost basis, or (3) a credit loss exists where we do
not expect to recover the entire amortized cost basis of the instrument. If we intend to sell or it is more likely than not that we will be required to sell the
available-for-sale debt instrument before recovery of its amortized cost basis, we recognize an other-than-temporary impairment in earnings equal to the entire
difference between the debt instruments’ amortized cost basis and its fair value. For available-for-sale debt instruments that are considered other-than-
temporarily impaired due to the existence of a credit loss, if we do not intend to sell and it is not more likely than not that we will be required to sell the
instrument before recovery of its remaining amortized cost basis (amortized cost basis less any current-period credit loss), we separate the amount of the
impairment into the amount that is credit related and the amount due to all other factors. The credit loss component is recognized in earnings while loss related
to all other factors is recorded as other comprehensive income (loss).
We performed an impairment review of our investment portfolio as of January 30, 2011. Based on our impairment review and having considered the
guidance of the relevant accounting literature, we did not record any other than temporary impairment charges during fiscal year 2011. We concluded that our
investments were appropriately valued and that no additional other than temporary impairment charges were necessary on our portfolio of available for sale
investments as of January 30, 2011.
66