Oracle 2014 Annual Report Download - page 95

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2015
Oracle Corporation develops, manufactures, markets, sells, hosts and supports database and middleware software, application software, cloud
infrastructure, hardware systems—including Oracle Engineered Systems, computer server, storage, networking and industry specific hardware
products—and related services that are engineered to work together in cloud-based and on-premises information technology (IT) environments.
We offer our customers the option to purchase our software and hardware systems products and related services to manage their own cloud-
based or on-premises IT environments, or to deploy our comprehensive set of cloud service offerings including Oracle Software as a Service
(SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). Customers that purchase our software products may elect to purchase
software license updates and product support contracts, which provide our customers with rights to unspecified product upgrades and
maintenance releases issued during the support period as well as technical support assistance. Customers that purchase our hardware products
may elect to purchase hardware systems support contracts, which provide customers with software updates for software components that are
essential to the functionality of our hardware products, such as Oracle Solaris and certain other software products, and can include product
repairs, maintenance services, and technical support services. We also offer customers a broad set of services offerings including consulting
services, advanced customer support services and education services.
Oracle Corporation conducts business globally and was incorporated in 2005 as a Delaware corporation and is the successor to operations
originally begun in June 1977.
Basis of Financial Statements
The consolidated financial statements included our accounts and the accounts of our wholly- and majority-owned subsidiaries. Noncontrolling
interest positions of certain of our consolidated entities are reported as a separate component of consolidated equity from the equity attributable
to Oracle’s stockholders for all periods presented. The noncontrolling interests in our net income were not significant to our consolidated results
for the periods presented and therefore have been included as a component of non-operating income (expense), net in our consolidated
statements of operations. Intercompany transactions and balances have been eliminated. Certain other prior year balances have been reclassified
to conform to the current year presentation. Such reclassifications did not affect total revenues, operating income or net income.
Acquisition related and other expenses as presented in our consolidated statements of operations for fiscal 2015 included $186 million related to
a goodwill impairment loss (refer to Note 7 below for additional information) and for fiscal 2015 and 2013 included benefits of $53 million and
$306 million, respectively, related to certain litigation (refer to Note 18 below for additional information). Further, acquisition related and other
expenses for fiscal 2013 included a change in fair value of contingent consideration payable, which resulted in a net benefit of $387 million in
fiscal 2013 (refer to Note 2 below for additional information).
In fiscal 2015, we adopted Accounting Standards Update (ASU) No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying
the Presentation of Debt Issuance Costs (ASU 2015-03). In connection with the adoption of ASU 2015-03, we reclassified debt issuance costs
related to our senior notes from other assets to notes payable, non-current as a deduction to the carrying amounts of our senior notes in our
May 31, 2015 and 2014 consolidated balance sheets. The adoption of ASU 2015-03 did not have a material impact on our consolidated financial
statements.
In fiscal 2015, we also adopted ASU 2015-02, Amendments to the Consolidation Analysis , ASU 2015-01, Simplifying Income Statement
Presentation by Eliminating the Concept of Extraordinary Items
, ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to
Continue as a Going Concern , ASU 2014-12, Accounting for Share-
Based Payments When the Terms of an Award Provide That a Performance
Target Could Be Achieved after the Requisite Service Period , and ASU 2014-08, Reporting Discontinued Operations and Disclosures of
Disposals of Components of an Entity
, none of which had an impact on our reported financial position or results of operations and cash flows.
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ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES