Crucial 2012 Annual Report Download - page 51

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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, automotive, industrial, embedded and mobile products. In
addition, we manufacture components for 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, none of which are material, have been made to prior period amounts to conform to current period
presentation. The payment for the acquisition of noncontrolling interests in 2011 has been corrected and reclassified in the
statement of cash flows from an investing activity to a financing activity. Disclosures of certain deferred tax assets and
liabilities in prior years were corrected with corresponding changes in the valuation allowance, resulting in no change to net
deferred tax assets.
Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Our fiscal years 2012, 2011 and
2010 each contained 52 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 collectability 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, DRAM and certain emerging memory technologies 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 – IM Flash" notes.)
Stock-based Compensation: Stock-based compensation is measured at the grant date, based on the fair value of the award,
and 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.