Crucial 2014 Annual Report Download - page 54

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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 one of the world's leading providers of advanced semiconductor solutions. Through our
worldwide operations, we manufacture and market a full range of 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. 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. Certain
deferred tax assets in prior years were corrected with corresponding changes in the valuation allowance, resulting in no change
to net deferred tax assets. Changes in these items were not material for any period presented.
Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal years 2014, 2013 and 2012
each contained 52 weeks. Fiscal year 2015 will contain 53 weeks, and the first quarter of fiscal 2015 will contain 14 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 significant.
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. If we are unable to
reasonably estimate returns or the price is not fixed or determinable, sales made under agreements allowing rights of return or
price protection 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 has passed tests
for performance and reliability. Subsequent to product qualification, product costs are valued in inventory. Product design and
other research and development costs for certain technologies are shared with our joint venture partners. Amounts receivable
from cost-sharing arrangements are reflected as a reduction of research and development expense. (See "Equity Method
Investments" and "Equity – Noncontrolling Interests in Subsidiaries" 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.