Symantec 1997 Annual Report Download - page 44

42 SYMANTEC CORPORATION
Business
Symantec Corporation (“Symantec” or the “Company”)
develops, markets and supports a diversified line of application
and system software products designed to enhance individual
and workgroup productivity. Symantec’s products, comprising
both application software and system software, are currently
organized into the following three major product groups:
Remote Productivity Solutions, Security and Assistance
and Emerging Businesses and Other. Customers consist
primarily of corporations, higher education institutions,
government agencies and individual users, which are mainly
located in North America, Europe and Asia/Pacific.
Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of Symantec Corporation and its wholly-owned
subsidiaries (“Symantec” or the “Company”). All significant
intercompany accounts and transactions have been eliminated.
Basis of Presentation
During fiscal 1997, 1996 and 1995, Symantec acquired
various companies in transactions accounted for as poolings
of interest. Accordingly, all financial information has been
restated to reflect the combined operations of Symantec and
the acquired companies with the exception of Intec Systems
Corporation (“Intec”), SLR Systems, Inc. (“SLR”) and Fast
Track, Inc. (“Fast Track”). The results of operations of Intec,
SLR and Fast Track were not material to Symantec’s consoli-
dated financial statements, and therefore, amounts prior to
the year of acquisition were not combined with Symantec’s
financial statements.
Symantec has a 52/53-week fiscal accounting year.
Accordingly, all references as of and for the periods ended
March 31, 1997, 1996 and 1995 reflect amounts as of and for
the periods ended March 28, 1997, March 29, 1996 and
March 31, 1995, respectively. The fiscal year ending on April
3, 1998 will be comprised of a 53 week period.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires manage-
ment to make estimates and assumptions that affect the
amounts reported in the financial statements and accompa-
nying notes. Actual results could differ from those estimates.
Foreign Currency Translation
The functional currency of the Company’s foreign
subsidiaries is the local currency. Non-current assets and
liabilities denominated in foreign currencies are translated
using the exchange rate on the balance sheet dates. The
cumulative translation adjustments resulting from this
process are shown separately as a component of stockholders’
equity. Revenues and expenses are translated using average
exchange rates prevailing during the year. Foreign currency
transaction gains and losses are included in the determination
of net income (loss).
Revenue Recognition
Symantec recognizes revenue upon shipment when no
significant vendor obligations remain and collection of the
receivable, net of provisions for estimated future returns, is
probable. Symantec offers the right of return of its products
under various policies. The Company estimates and maintains
reserves for product returns. Based on returns experienced,
the Company’s estimates have been materially accurate.
During fiscal 1997, Symantec sold certain software
products and related tangible assets to JetForm Corporation
(“JetForm”) and to the Hewlett-Packard Company
(“Hewlett-Packard”) (see Note 9 of Notes to Consolidated
Financial Statements). Due to the uncertainty regarding the
ultimate collectibility of certain contractual installment
payments from JetForm, Symantec is recognizing the related
revenue as payments are due and collectibility is assured. Due
to the uncertainty regarding the amounts upon which the
related Hewlett-Packard payments are determined, Symantec is
recognizing these amounts as revenue as they are determinable.
Revenues related to significant post-contract support
agreements (generally product maintenance agreements) are
deferred and recognized over the period of the agreements.
The estimated cost of providing insignificant post-contract
support (generally telephone support) is accrued at the time
of the sale and is included in sales and marketing expense.
Technical support costs included in sales and marketing
Summary of
Significant Accounting Policies