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NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
period, except for those expenses related to the previously noted balance sheet amounts, which are remeasured at
historical exchange rates. Gains or losses from foreign currency remeasurement are included in “Interest and
other income, net” and to date have not been significant.
Comprehensive Income
Comprehensive income consists of net earnings and unrealized gains and losses on available-for-sale
securities, recorded net of tax.
Goodwill and Intangible Assets
Effective fiscal 2003, the Company completed the adoption of Statement of Financial Accounting Standards
No. 142 (“SFAS No. 142”), Goodwill and Other Intangible Assets. As required by SFAS No. 142, the Company
discontinued amortizing the remaining balances of goodwill as of the beginning of fiscal 2003. All remaining and
future acquired goodwill will be subject to impairment tests annually, or earlier if indicators of potential
impairment exist, using a fair-value-based approach. All other intangible assets will continue to be amortized
over their estimated useful lives and assessed for impairment under SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets.
In conjunction with the implementation of SFAS No. 142, during the first quarter of fiscal 2003 the
Company completed a transitional goodwill impairment test and concluded that no impairment was indicated.
Upon adoption of the new business combination rules, acquired workforce no longer met the definition of an
identified intangible asset. As a result, the net balance of $1.8 million was reclassified to goodwill in fiscal 2003.
The adoption of SFAS No. 142 ceased the amortization of goodwill, which otherwise would have been
approximately $13.0 million for the year ended January 26, 2003. In accordance with SFAS No. 142, the
Company has elected to perform its annual impairment review during the fourth quarter. The Company has
completed its annual goodwill impairment test and concluded that there was no impairment. The effects of the
adoption of SFAS No. 142 are as follows:
Year Ended
January 26,
2003
Year Ended
January 27,
2002
Year Ended
January 28,
2001
(in thousands, except per share data)
Net income .......................................... $90,799 $176,924 $98,469
Goodwill and workforce amortization, tax effected ........... $ — $ 7,065 $ —
Adjusted net income ................................... $90,799 $183,989 $98,469
Reported basic earnings per share ........................ $ 0.59 $ 1.24 $ 0.75
Reported diluted earnings per share ....................... $ 0.54 $ 1.03 $ 0.62
Adjusted basic earnings per share ........................ $ 0.59 $ 1.29 $ 0.75
Adjusted diluted earnings per share ....................... $ 0.54 $ 1.08 $ 0.62
The carrying amount of goodwill is as follows:
January 26,
2003
January 27,
2002
(in thousands)
3dfx ........................................................... $50,326 $50,326
Other .......................................................... 3,901 —
Total goodwill ............................................... $54,227 $50,326
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