Oracle 2015 Annual Report Download - page 94

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2016
• ASU 2016-06, DerivativesandHedging(Topic815):ContingentPutandCallOptionsinDebtInstruments;
• ASU 2016-05, DerivativesandHedging(Topic815):EffectofDerivativeContractNovationsonExistingHedgeAccountingRelationships;
• ASU 2015-16, BusinessCombinations(Topic805):SimplifyingtheAccountingforMeasurement-PeriodAdjustments;
• ASU 2015-15, Interest—ImputationofInterest(Subtopic835-30):PresentationandSubsequentMeasurementofDebtIssuanceCostsAssociatedwith
Line-of-CreditArrangements—AmendmentstoSECParagraphsPursuanttoStaffAnnouncementatJune18,2015EITFMeeting;
• ASU 2015-11, Inventory(Topic330):SimplifyingtheMeasurementofInventory; and
• ASU 2015-05, Intangibles—GoodwillandOther—Internal-UseSoftware(Subtopic350-40):Customer’sAccountingforFeesPaidinaCloud
ComputingArrangement.
Use of Estimates
Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) as set forth in the Financial
Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC), and we consider the various staff accounting bulletins and other applicable
guidance issued by the U.S. Securities and Exchange Commission. These accounting principles require us to make certain estimates, judgments and assumptions.
We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these
estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date
of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent that there are differences between
these estimates, judgments or assumptions and actual results, our consolidated financial statements will be affected. In many cases, the accounting treatment of a
particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s
judgment in selecting among available alternatives would not produce a materially different result.
Revenue Recognition
Our sources of revenues include:
• cloud and on-premise software revenues, which include the sale of: new software licenses, which generally grant to customers a perpetual right to use our
database, middleware, applications and industry-specific software products; cloud SaaS and PaaS offerings, which grant customers access to a broad
range of our software and related support offerings on a subscription basis in a secure, standards-based cloud computing environment; cloud IaaS
offerings, which grant customers access to infrastructure cloud services to perform elastic compute, storage and networking services, and also provide
management services for software and hardware and related IT infrastructure, both generally on a subscription basis; and software license updates and
product support offerings (described further below);
• hardware revenues, which include the sale of hardware products including Oracle Engineered Systems, computer servers, storage products, networking
and data center fabric products, and industry-specific hardware; and hardware support revenues (described further below); and
• services revenues, which are earned from providing software and hardware related services including consulting, advanced customer support and
education services.
Revenues generally are recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.
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