Symantec 2003 Annual Report Download - page 53

Symantec 2003 51
June 2002 quarter. We identified four reporting units, which represents
our primary operating segments as indicated in Note 16, and determined
that there was no impairment of goodwill recorded upon implementa-
tion of SFAS No. 142. We completed our annual goodwill impairment
test during the March 2003 quarter and determined that there was no
impairment of goodwill. We will continue to test for impairment during
the fourth quarter of each year, or earlier if indicators of impairment
exist.
As a result of the discontinuance of the amortization of goodwill existing
as of March 31, 2002, the application of SFAS No. 142 resulted in an
increase in our results of operations of approximately $198.4 million
during fiscal 2003. At March 31, 2003, we had goodwill of approxi-
mately $833.4 million.
On April 1, 2002, we adopted SFAS No. 144, Accounting for Impairment
or Disposal of Long-Lived Assets. SFAS No. 144 supersedes SFAS No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of and elements of APB No. 30, Reporting
the Results of Operations – Reporting the Effects of Disposal of a
Segment of a Business and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions. SFAS No. 144 addresses financial
accounting and reporting for the impairment and disposal of long-lived
assets. The adoption of this statement did not have a material impact
on our financial position or results of operations.
In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146 requires that
the liability for a cost associated with an exit or disposal activity be rec-
ognized when the liability is incurred rather than when a commitment is
made to an exit or disposal plan. SFAS No. 146 also establishes that the
liability should initially be measured and recorded at fair value. SFAS
No. 146 became effective for exit or disposal activities that were initi-
ated after December 31, 2002. The adoption of this statement may
result in recognizing the cost of future restructuring activities, if any,
over a period of time rather than in the reporting period that the plan
of restructuring is adopted.
In November 2002, the FASB issued Interpretation No. 45, Guarantor’s
Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. Under this Interpretation,
a liability shall be recognized for the fair value of the obligation under-
taken in issuing or modifying guarantees and indemnification arrange-
ments after December 31, 2002. Certain of the software licenses that
we have granted contain provisions that indemnify licensees of the soft-
ware from damages and costs resulting from claims alleging that our
software infringes the intellectual property rights of a third party. We
have historically received only a limited number of requests for indemni-
fication under these provisions and have not been required to make
material payments pursuant to these provisions. Accordingly, we have
not recorded a liability related to these indemnification provisions. As of
March 31, 2003, we had no liability associated with any of our indemni-
fication agreements on our balance sheet.
In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, an Interpretation of ARB No. 51, that provides
guidance for determining when a primary beneficiary should consolidate
a variable interest entity that functions to support the activities of the
primary beneficiary. The effective date of Interpretation No. 46 is the
first interim period beginning after June 15, 2003 for variable interest
entities acquired before February 1, 2003 and immediately to variable
interest entities created after January 31, 2003. In the March 2003
quarter, we purchased four of our facilities that were classified as oper-
ating leases under synthetic lease transactions by purchasing the land
and buildings for approximately $17.9 million and $106.0 million,
respectively. As such, we had no interest in any variable interest entities
as of March 31, 2003.
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity,
which provides guidance for how an issuer classifies and measures cer-
tain financial instruments with characteristics of both liabilities and
equity. SFAS No. 150 is effective for financial instruments entered into
or modified after May 31, 2003, and otherwise is effective at the begin-
ning of the first interim period beginning after June 15, 2003. The adop-
tion of this statement will not have an impact on our financial position
or results of operations.
Reclassifications Certain previously reported amounts have been
reclassified to conform to the current presentation format with no
impact on net income (loss).