NVIDIA 2013 Annual Report Download - page 220

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
76
certain laboratories at our Austin facility and international locations to their original condition upon lease termination were
$11.1 million and $10.6 million, respectively.
Adoption of New and Recently Issued Accounting Pronouncements
In July 2013, the Financial Accounting Standards Board, or FASB, issued guidance regarding the presentation of
unrecognized tax benefits when a net operating loss carryforward, similar tax loss, or tax credit carryforward exists. The
new guidance requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the
financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax
credit carryforward when settlement in this manner is available under the tax law. This guidance is effective on a prospective
basis for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December
15, 2013. Retrospective and early adoption is permitted. We expect to adopt this guidance in our interim and annual periods
beginning January 27, 2014. We do not believe the adoption of this guidance will have a material impact on our consolidated
financial statements.
In February 2013, the FASB issued updated guidance requiring entities to report the effect of significant reclassifications
to accumulated other comprehensive income on the respective line items in net income. These reclassifications are reported
only if U.S. GAAP requires the entire amount to be reclassified to net income. For other amounts that are not required under
U.S. GAAP to be reclassified in their entirety from accumulated other comprehensive income to net income in the same
reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional
detail about those amounts. We adopted this guidance in our interim period ended April 28, 2013. The adoption of this
guidance did not impact our financial statements, as the guidance is related to disclosure only, and we have not had significant
reclassifications out of accumulated other comprehensive income.
Note 2 - Stock-Based Compensation
We measure stock-based compensation expense based on the estimated fair value of equity awards at the grant date,
and recognize the expense using a straight-line attribution method over the requisite employee service period. We estimate
the fair value of employee stock options on the date of grant using a binomial model and we use the closing trading price
of our common stock on the date of grant, minus a dividend yield discount, as the fair value of awards of RSUs. We estimate
the fair value of shares to be issued our employee stock purchase plan using the Black-Scholes at the commencement of an
offering period in March and September each year. Our stock-based compensation for employee stock purchase plan is
expensed using an accelerated amortization model.
Our consolidated statements of income include stock-based compensation expense, net of amounts capitalized as
inventory, as follows:
Year Ended
January 26,
2014 January 27, 2013 January 29, 2012
(In thousands)
Cost of revenue..................................................................................... $ 10,688 $ 10,490 $ 11,322
Research and development ................................................................... 82,940 82,157 80,502
Sales, general and administrative ......................................................... 42,667 44,015 44,530
Total...................................................................................................... $ 136,295 $ 136,662 $ 136,354
As of January 26, 2014 and January 27, 2013, the aggregate amount of unearned stock-based compensation expense
related to our equity awards was $241.3 million and $208.7 million, respectively, adjusted for estimated forfeitures. As of
January 26, 2014 and January 27, 2013, we expect to recognize the unearned stock-based compensation expense related to