AMD 2007 Annual Report Download - page 239

Spansion Inc.
Notes to Consolidated Financial Statements—(Continued)
2. Change in Fiscal Year and Basis of Presentation
Fiscal Year
The Company operates on a 52- to 53-week fiscal year ending on the last Sunday in December. The year ended December 31, 2006 consisted of 53 weeks
and the years ended December 25, 2005 and December 26, 2004 each consisted of 52 weeks.
3. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries after elimination of intercompany accounts
and transactions.
Use of Estimates
The preparation of consolidated financial statements and disclosures in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of commitments and contingencies and the
reported amounts of revenues and expenses during the reporting periods. Estimates are used for revenue recognition, allowance for doubtful accounts, product
warranties, inventory valuation, impairment of long-lived assets, income taxes, stock-based compensation expenses and pension and postretirement benefits,
among others. Actual results may to differ from those estimates, and such differences may be material to the financial statements.
Cash Equivalents
Cash equivalents consist of financial instruments that are readily convertible into cash and have original maturities of three months or less at the time of
purchase.
Investments
The Company’s investments in marketable securities consist of money market funds, commercial paper, auction rate securities and publicly traded equity
securities. These securities are designated as available-for-sale and are reported at fair market value with the related unrealized gains and losses included in
accumulated other comprehensive income (loss), net of tax, a component of stockholders equity/members’ capital. The Company recognizes an impairment
charge when the declines in the fair values of its investments below the cost basis are judged to be other-than-temporary. The Company considers various factors
in determining whether to recognize a decline in value, including the length of time and extent to which the fair value has been less than the Company’s cost
basis, the financial condition and near-term prospects of the issuer or investee, and the Company’s intent and ability to hold the investment for a period of time
sufficient to allow for any anticipated recovery in market value. The Company has not recorded any such impairment in any of the periods presented. The cost of
securities sold is based on the specific identification method. The Company classifies investments in marketable securities as current when their remaining time
to maturity is less than or equal to 12 months or, if time to maturity is greater than 12 months, when they represent investments of cash that are intended to be
used in current operations.
Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008