Crucial 2012 Annual Report Download - page 254

9
INOTERA MEMORIES, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Reasons for and Cumulative Effect of Accounting Principle Change
(a) Effective January 1, 2009, the Company adopted the newly revised SFAS No. 10 “Inventories” with no
retroactive presentation requirement. The adoption of this new accounting principle resulted in the inclusion
to the cost of goods sold of the unallocated fixed overhead and direct labor cost of $12,903,228 and gain from
price recovery of inventories of $1,767,684 for the year ended December 31, 2009.
(b) Effective January 1, 2011, the Company has adopted SFAS No. 41 “Operating Segment”, which replaced
SFAS No. 20 “Segment Reporting”. Under SFAS No. 41, information is disclosed to enable users of financial
of financial statements to evaluate the nature and financial effects of the business activities in which the
Company engages and the economic environment in which it operates. Accordingly, operating segments are
identified and disclosed based on the information provided to the chief operating decision maker (“CODM”).
Management has determined, based on the financial information provided to the CODM, that the Company
does not have any operating segments as that term is defined in SFAS No. 41. Entity wide disclosures required
under SFAS No. 41 are including in Note 26.
(c) Effective January 1, 2011, the Company has adopted the third amendment of SFAS No. 34 “Financial
Instruments: Recognition and Measurement”. Under this amended accounting principle, impairment loss
arising from valuation of financial instruments is now recognized as expenses instead of being directly adjusted
to stockholders' equity and this change in accounting is not anymore treated as a change in accounting principle.
The adoption of this amended accounting principle did not affect net loss for the year ended December 31,
2011.
(4) Cash and Cash Equivalents
December 31,
2010 2011
Cash on hand - petty cash $ 15 30
Cash in bank - checking account 17,637 41,124
Cash in bank - demand deposit account 824 547
Cash in bank - foreign currency account 4,317,570 1,393,369
Certificate of deposit - foreign currency account — 4,028,570
Cash equivalents - commercial paper 172,421 —
Cash equivalents - repurchase agreements collateralized by corporate bonds 600,200 —
$ 5,108,667 5,463,640