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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2015
We record deferred tax assets for stock-based compensation awards that result in deductions on our income tax returns based on the amount of
stock-based compensation recognized and the fair value attributable to the vested portion of stock awards assumed in connection with a business
combination, at the statutory tax rate in the jurisdiction in which we will receive a tax deduction.
Advertising
All advertising costs are expensed as incurred. Advertising expenses, which are included within sales and marketing expenses, were $55 million,
$79 million and $85 million in fiscal 2015, 2014 and 2013, respectively.
Research and Development and Software Development Costs
All research and development costs are expensed as incurred.
Software development costs required to be capitalized under ASC 985-20, Costs of Software to be Sold, Leased or Marketed, and under ASC
350-40, Internal-Use Software, were not material to our consolidated financial statements in fiscal 2015, 2014 and 2013.
Acquisition Related and Other Expenses
Acquisition related and other expenses consist of personnel related costs for transitional and certain other employees, stock-based compensation
expenses, integration related professional services, certain business combination adjustments including adjustments after the measurement period
has ended and certain other operating items, net. Stock-based compensation included in acquisition related and other expenses result from
unvested options and restricted stock-based awards assumed from acquisitions whereby vesting was accelerated upon termination of the
employees pursuant to the original terms of those options and restricted stock-based awards.
Included in acquisition related and other expenses for fiscal 2015 was a goodwill impairment loss of $186 million (refer to Note 7 below for
additional information). Included in acquisition related and other expenses for fiscal 2015 and 2013 were benefits of $53 million and $306
million, respectively, related to certain litigation (refer to Note 18 below for additional information). Also included in acquisition related and
other expenses for fiscal 2013 were changes in estimates for contingent consideration payable, which reduced acquisition related and other
expenses by $387 million during fiscal 2013 (refer to Note 2 below for additional information).
102
Year Ended May 31,
(in millions)
2015
2014
2013
Transitional and other employee related costs
$
57
$
27
$
27
Stock
-
based compensation
5
10
33
Professional fees and other, net
(35
)
20
(276
)
Business combination adjustments, net
184
(16
)
(388
)
Total acquisition related and other expenses
$
211
$
41
$
(604
)