Symantec 2006 Annual Report Download - page 87

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records the related legal expenses when incurred. Amounts that we accrue are not discounted. The material
assumptions used to estimate the amount of legal expenses include:
‚ The monthly legal expense incurred by our external attorneys on the particular case being evaluated
‚ Communication between us and our external attorneys on the expected duration of the lawsuit and the
estimated expenses during that time
‚ Our strategy regarding the lawsuit
‚ Deductible amounts under our insurance policies
‚ Past experiences with similar lawsuits
Accumulated Other Comprehensive Income
We report comprehensive income or loss in accordance with the provisions of SFAS No. 130, Reporting
Comprehensive Income, which establishes standards for reporting comprehensive income and its components
in the financial statements. The components of other comprehensive income (loss) consist of unrealized gains
and losses on available-for-sale securities, net of tax, and foreign currency translation adjustments, net of tax.
Unrealized gains and losses on our available-for-sale securities were $6 million in fiscal 2006 and insignificant
in fiscal 2005 and 2004. Comprehensive income is presented in the accompanying Consolidated Statements of
Stockholders' Equity and Comprehensive Income.
Newly Adopted and Recently Issued Accounting Pronouncements
In February 2006, the Financial Accounting Standards Board, or FASB, issued SFAS No. 155,
Accounting for Certain Hybrid Financial Instruments, which amends SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, and SFAS No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. SFAS No. 155 simplifies the accounting for certain
derivatives embedded in other financial instruments by allowing them to be accounted for as a whole if the
holder elects to account for the entire instrument on a fair value basis. SFAS No. 155 also clarifies and
amends certain other provisions of SFAS No. 133 and SFAS No. 140. SFAS No. 155 is effective for all
financial instruments acquired, issued, or subject to a remeasurement event occurring in fiscal years beginning
after September 15, 2006. Earlier adoption is permitted, provided the company has not yet issued financial
statements, including for interim periods, for that fiscal year. We do not expect the adoption of SFAS No. 155
to have a material impact on our consolidated financial position, results of operations, or cash flows.
In June 2005, the FASB issued FASB Staff Position, or FSP, FAS 143-1, Accounting for Electronic
Equipment Waste Obligations, which provides guidance on the accounting for certain obligations associated
with the Directive on Waste Electrical and Electronic Equipment, or the Directive, which was adopted by the
European Union, or the EU. Under the Directive, the waste management obligation for historical equipment,
defined as products put on the market on or prior to August 13, 2005, remains with the commercial user until
the equipment is replaced. FSP FAS 143-1 is required to be applied to the later of the first fiscal period ending
after June 8, 2005 or the date of the Directive's adoption into law by the applicable EU member countries in
which we have significant operations. We are currently evaluating the impact of FSP FAS 143-1 on our
financial position and results of operations. The effects will depend on the respective laws adopted by the EU
member countries.
In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections, which
replaces APB No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim
Financial Statements Ì An Amendment of APB Opinion No. 28. SFAS No. 154 provides guidance on
accounting for and reporting changes in accounting principle and error corrections. SFAS No. 154 requires
that changes in accounting principle be applied retrospectively to prior period financial statements and is
effective for fiscal years beginning after December 15, 2005. When adopted and if used, SFAS No. 154 would
have a material impact on our consolidated financial position, results of operations, or cash flows.
In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment, which requires companies
to measure and recognize compensation expense for all stock-based payments at fair value. SFAS No. 123R is
effective for annual periods beginning after June 15, 2005 and, thus, will be effective for us beginning with the
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