8x8 2010 Annual Report Download - page 42

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40
157, “Fair Value Measurements” that require separate disclosure of significant transfers in and out of Level 1 and Level 2 fair
value measurements and the presentation of separate information regarding purchases, sales, issuances and settlements for
Level 3 fair value measurements. Additionally, ASU 2010-6 provides amendments to subtopic 820-10 that clarify existing
disclosures about the level of disaggregation and inputs and valuation techniques. ASU 2010-6 is effective for financial
statements issued for interim and annual periods ending after December 15, 2010. We will adopt this pronouncement in the
third quarter of fiscal 2011 and do not expect the adoption of ASU 2010-06 will have a material impact on our consolidated
results of operation and financial condition.
In February 2010, FASB issued ASU 2010-9 Subsequent Events (Topic 855) Amendments to Certain Recognition and
Disclosure Requirements.” ASU 2010-9 amends disclosure requirements within Subtopic 855-10. An entity that is an SEC filer
is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential
conflicts between Subtopic 855-10 and the SEC's requirements. The adoption of ASU 2010-09 did not have a material impact
on our consolidated results of operation and financial condition.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The primary objective of our investment activities is to preserve principal while maximizing income without significantly
increasing risk. Some of the securities in which we invest may be subject to market risk. This means that a change in prevailing
interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we may maintain our
portfolio of cash equivalents and investments in a variety of securities, including commercial paper, money market funds, debt
securities and certificates of deposit. The risk associated with fluctuating interest rates is limited to our investment portfolio
and we do not believe that a 10% change in interest rates would have a significant impact on our interest income.
During the years ended March 31, 2010 and 2009, we did not have any outstanding debt instruments other than equipment
under capital leases and, therefore, we were not exposed to market risk relating to interest rates.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Page
FINANCIAL STATEMENTS:
Report of Independent Registered Public Accounting Firm 41
Report of Independent Registered Public Accounting Firm 42
Consolidated Balance Sheets at March 31, 2010 and 2009 43
Consolidated Statements of Operations for each of the three years in the period ended March 31, 2010 44
Consolidated Statements of Stockholders' Equity for each of the three years in the period ended March
31, 2010
45
Consolidated Statements of Cash Flows for each of the three years in the period ended March 31, 2010 46
Notes to Consolidated Financial Statements 47
FINANCIAL STATEMENT SCHEDULE:
Schedule II -- Valuation and Qualifying Accounts
Schedules other than the one listed above have been omitted because they are inapplicable, because the
required information has been included in the financial statements or notes thereto, or the amounts are
immaterial.
67
Consolidated Quarterly Financial Data 68