Symantec 2011 Annual Report Download - page 99

incur expenses resulting from our eCommerce platform, components of which are recorded as a cost of revenue and
an operating expense.
Fluctuations in the U.S. dollar compared to foreign currencies unfavorably impacted our international revenue
by approximately $53 million for fiscal 2011 as compared to fiscal 2010 and favorably impacted our international
revenue by approximately $14 million for fiscal 2010 as compared to fiscal 2009. We are unable to predict the extent
to which revenue in future periods will be impacted by changes in foreign currency exchange rates. If our level of
international sales and expenses increase in the future, changes in foreign exchange rates may have a potentially
greater impact on our revenue and operating results.
Our net income attributable to Symantec Corporation stockholders was $597 million for fiscal 2011 and
$714 million for 2010. Our net income for fiscal 2011 was negatively impacted by a loss of $21 million from the
liquidation of certain foreign entities and $27 million from the impairment of intangible assets, while net income for
fiscal 2010 was positively affected by a gain of $47 million from the liquidation of certain foreign entities. Our fiscal
2011 and fiscal 2010 net income were positively impacted relative to the preceding year by a decrease of
$119 million and $128 million, respectively, in cost of revenue primarily related to certain acquired product rights
becoming fully amortized. Net income for fiscal 2011 and fiscal 2010 was also positively impacted by tax benefits
resulting from the reversal of accrued liabilities and correlative benefits related to the Veritas Software tax
assessment for 2000 and 2001 of $49 million and $79 million, respectively.
CRITICAL ACCOUNTING ESTIMATES
The preparation of the Consolidated Financial Statements and related notes included in this annual report in
accordance with generally accepted accounting principles in the United States, requires us to make estimates, which
include judgments and assumptions, that affect the reported amounts of assets, liabilities, revenue, and expenses,
and related disclosure of contingent assets and liabilities. We have based our estimates on historical experience and
on various assumptions that we believe to be reasonable under the circumstances. We evaluate our estimates on a
regular basis and make changes accordingly. Historically, our critical accounting estimates have not differed
materially from actual results; however, actual results may differ from these estimates under different conditions. If
actual results differ from these estimates and other considerations used in estimating amounts reflected in the
Consolidated Financial Statements included in this annual report, the resulting changes could have a material
adverse effect on our Consolidated Statements of Operations, and in certain situations, could have a material
adverse effect on liquidity and our financial condition.
A critical accounting estimate is based on judgments and assumptions about matters that are uncertain at the
time the estimate is made. Different estimates that reasonably could have been used or changes in accounting
estimates could materially impact the operating results or financial condition. We believe that the estimates
described below represent our critical accounting estimates, as they have the greatest potential impact on our
consolidated financial statements. See also Note 1 of the Notes to the Consolidated Financial Statements included in
this annual report.
Revenue Recognition
We recognize revenue primarily pursuant to the requirements under the authoritative guidance on software
revenue recognition, and any applicable amendments or modifications. Revenue recognition requirements in the
software industry are very complex and require us to make many estimates.
For software arrangements that include multiple elements, including perpetual software licenses and main-
tenance and/or services, packaged products with content updates, managed security services, and subscriptions, we
allocate and defer revenue for the undelivered items based on vendor specific objective evidence (“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 revenue. VSOE of each element is based on the price for which the
undelivered element is sold separately. We determine fair value of the undelivered elements 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
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