Symantec 2011 Annual Report Download - page 138

adjustments resulting from this process are included as a component of Accumulated other comprehensive income.
In the event of liquidation of a foreign subsidiary, the accumulated translation adjustment attributable to that foreign
subsidiary is reclassified from Accumulated other comprehensive income and included in Other Income, net. As a
result of such liquidations in fiscal 2011, 2010, and 2009, we recorded a net loss of $21 million, a net gain of
$47 million, and a net loss of $5 million, respectively. Foreign currency transaction gains and losses are also
included in Other income, net, in the Consolidated Statements of Operations. We had foreign currency transaction
losses of $7 million and $3 million for fiscal 2011 and 2010, respectively. We had a foreign currency transaction
gain in fiscal 2009 of $11 million. Deferred tax assets (liabilities) are established on the cumulative translation
adjustment attributable to unremitted foreign earnings that are not intended to be indefinitely reinvested.
Revenue Recognition
We market and distribute our software products both as stand-alone products and as integrated product suites.
We recognize revenue when 1) persuasive evidence of an arrangement exists, 2) delivery has occurred or services
have been rendered, 3) fees are fixed or determinable and 4) collectability is probable. If we determine that any one
of the four criteria is not met, we will defer recognition of revenue until all the criteria are met.
We derive revenue primarily from sales of content, subscriptions, and maintenance and licenses. We present
revenue net of sales taxes and any similar assessments.
Content, subscriptions, and maintenance revenue includes arrangements for software maintenance and
technical support for our products, content and subscription services primarily related to our security products,
revenue from arrangements where vendor-specific objective evidence (“VSOE”) of the fair value of undelivered
elements does not exist, arrangements for managed security services, and Software-as-a-Service (“SaaS”) offer-
ings. These arrangements are generally offered to our customers over a specified period of time, and we recognize
the related revenue ratably over the maintenance, subscription, or service period.
Content, subscriptions, and maintenance revenue also includes professional services revenue, which consists
primarily of the fees we earn related to consulting and educational services. We generally recognize revenue from
professional services as the services are performed or upon written acceptance from customers, if applicable,
assuming all other conditions for revenue recognition noted above have been met.
License revenue is derived primarily from the licensing of our various products and technology. We generally
recognize license revenue upon delivery of the product, assuming all other conditions for revenue recognition noted
above have been met.
We enter into perpetual software license agreements through direct sales to customers and indirect sales with
distributors and resellers. The license agreements generally include product maintenance agreements, for which the
related revenue is included with Content, subscriptions, and maintenance and is deferred and recognized ratably
over the period of the agreements.
For arrangements that include multiple elements, including perpetual software licenses, maintenance, ser-
vices, and packaged products with content updates, managed security services, and subscriptions, we allocate and
defer revenue for the undelivered items based on VSOE of the fair value of the undelivered elements, and recognize
the difference between the total arrangement fee and the amount deferred for the undelivered items as license
revenue. VSOE of each element is based on historical evidence of our stand-alone sales of these elements to third
parties or from the stated renewal rate for the undelivered elements. When VSOE does not exist for undelivered
items, the entire arrangement fee is recognized ratably over the performance period. Our deferred revenue consists
primarily of the unamortized balance of enterprise product maintenance, consumer product content updates,
managed security services, subscriptions, and arrangements where VSOE does not exist for an undelivered element.
For arrangements that include both software and non-software elements, we allocate revenue to the software
deliverables as a group and non-software deliverables based on their relative selling prices. In such circumstances,
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)