Crucial 2011 Annual Report Download - page 51

MICRON TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All tabular amounts in millions except per share amounts)
Significant Accounting Policies
Basis of presentation : We are a global manufacturer and marketer of semiconductor devices, principally DRAM, NAND Flash and NOR
Flash memory, as well as other innovative memory technologies, packaging solutions and semiconductor systems for use in leading-edge
computing, consumer, networking, embedded and mobile products. In addition, we manufacture CMOS image sensors and other semiconductor
products. The accompanying consolidated financial statements include the accounts of Micron Technology, Inc. and its consolidated subsidiaries
and have been prepared in accordance with accounting principles generally accepted in the United States of America. Certain reclassifications
have been made to prior period amounts to conform to current period presentation.
Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Our fiscal 2011 and 2010 contained 52 weeks and
our fiscal 2009 contained 53 weeks. All period references are to our fiscal periods unless otherwise indicated.
Use of estimates :
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted
in the United States of America requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues, expenses and related disclosures. Estimates and judgments are based on historical experience, forecasted events and various other
assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may differ under different assumptions or
conditions. We evaluate our estimates and judgments on an ongoing basis. Actual results could differ from estimates.
Product warranty : We generally provide a limited warranty that our products are in compliance with our specifications existing at the time
of delivery. Under our general terms and conditions of sale, liability for certain failures of product during a stated warranty period is usually
limited to repair or replacement of defective items or return of, or a credit with respect to, amounts paid for such items. Under certain
circumstances, we provide more extensive limited warranty coverage than that provided under our general terms and conditions. Our warranty
obligations are not material.
Revenue recognition : We recognize product or license revenue when persuasive evidence that a sales arrangement exists, delivery has
occurred, the price is fixed or determinable and collectibility is reasonably assured. Since we are unable to estimate returns and changes in market
price, and therefore the price is not fixed or determinable, sales made under agreements allowing pricing protection or rights of return (other than
for product warranty) are deferred until customers have resold the product.
Research and development : Costs related to the conceptual formulation and design of products and processes are expensed as research and
development as incurred. Determining when product development is complete requires judgment. Development of a product is deemed complete
once the product has been thoroughly reviewed and tested for performance and reliability. Subsequent to product qualification, product costs are
valued in inventory. Product design and other research and development costs for NAND Flash and DRAM are shared with our joint venture
partners. Amounts receivable from these cost-sharing arrangements are reflected as a reduction of research and development expense. (See
"Equity Method Investments" and "Consolidated Variable Interest Entities – NAND Flash joint ventures with Intel" notes.)
Stock-based compensation : Stock-based compensation is measured at the grant date, based on the fair value of the award, and is recognized
as expense under the straight-line attribution method over the requisite service period. We issue new shares upon the exercise of stock options or
conversion of share units. (See "Equity Plans" note.)
Stock repurchases : When we repurchase and retire our common stock, any excess of the repurchase price paid over par value is allocated
between paid-in capital and retained earnings.
Functional currency : The U.S. dollar is the functional currency for all of our consolidated operations.
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