McKesson 2013 Annual Report Download - page 64

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McKESSON CORPORATION
FINANCIAL NOTES
1. Significant Accounting Policies
Nature of Operations: McKesson Corporation (“McKesson,” the “Company,” the “Registrant” or “we” and other similar
pronouns) delivers pharmaceuticals, medical supplies and healthcare information technology that make healthcare safer while
reducing costs. We conduct our business through two operating segments, McKesson Distribution Solutions and McKesson
Technology Solutions, as further described in Financial Note 25, “Segments of Business.”
Basis of Presentation: The consolidated financial statements and accompanying notes are prepared in accordance with
U. S. generally accepted accounting principles (“GAAP”). The consolidated financial statements of McKesson include the
financial statements of all wholly-owned subsidiaries and majority-owned or controlled companies. We also evaluate our
ownership, contractual and other interests in entities to determine if they are variable interest entities (“VIEs”), if we have a
variable interest in those entities and the nature and extent of those interests. These evaluations are highly complex and
involve judgment and the use of estimates and assumptions based on available historical information and management's
judgment, among other factors. Based on our evaluations, if we determine we are the primary beneficiary of such VIEs we
consolidate such entities into our financial statements. The consolidated VIEs are not material to our consolidated financial
statements. Intercompany transactions and balances have been eliminated.
Fiscal Period: The Company's fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all
references to a particular year shall mean the Company's fiscal year.
Reclassifications: Certain prior year amounts have been reclassified to conform to the current year presentation.
Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires that we make estimates
and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual
amounts could differ from those estimated amounts.
Cash and Cash Equivalents: All highly liquid debt instruments purchased with original maturity of three months or less
at the date of acquisition are included in cash and cash equivalents.
Cash equivalents, which are available-for-sale, are carried at fair value. Cash equivalents are primarily invested in AAA
rated prime and U.S. government money market funds denominated in U.S. dollars, Canadian government securities,
overnight repurchase agreements collateralized by U.S. Treasury bonds, Canadian government securities and/or securities that
are guaranteed or sponsored by the U.S. government and an AAA rated prime money market fund denominated in British
pound sterling.
The remaining cash and cash equivalents are deposited with several financial institutions. Deposits at U.S. banks exceed
the amount insured by the Federal Deposit Insurance Corporation. We mitigate the risk of our short-term investment portfolio
by depositing funds with reputable financial institutions and monitoring risk profiles and investment strategies of money
market funds.
Restricted Cash: Cash that is subject to legal restrictions or is unavailable for general operating purposes is classified as
restricted cash and is included within prepaid expenses and other in the consolidated balance sheets. At March 31, 2013 and
2012 restricted cash was not material.
Marketable Securities Available for Sale: We carry our marketable securities, which are available for sale, at fair value
and they are included in prepaid expenses and other in the consolidated balance sheets. The net unrealized gains and losses,
net of the related tax effect, computed in marking these securities to market have been reported within stockholders' equity. At
March 31, 2013 and 2012 marketable securities were not material.