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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Among other changes, the revisions of FIN 46R (a) clariÑed some requirements of the original FIN 46,
which had been issued in January 2003, (b) eased some implementation problems, and (c) added new scope
exceptions. FIN 46R deferred the eÅective date of the Interpretation for public companies to the end of the
Ñrst reporting period ending after March 15, 2004, except that all public companies must at a minimum apply
the unmodiÑed provisions of the Interpretation to entities that were previously considered ""special-purpose
entities'' in practice and under the FASB literature prior to the issuance of FIN 46R by the end of the Ñrst
reporting period ending after December 15, 2003.
Among the scope exceptions, companies are not required to apply FIN 46R to an entity that meets the
criteria to be considered a ""business'' as deÑned in the Interpretation unless one or more of four named
conditions exist. FIN 46R applies immediately to a VIE created or acquired after January 31, 2003.
The Company has reviewed its investment portfolio to determine whether any of its equity investments
are considered variable interest entities. The Company did not identify any variable interest entities that must
be consolidated, but has made any required additional disclosures. The maximum exposure of any investment
that may be determined to be in a variable interest entity is limited to the amount invested.
In November 2002, the Financial Accounting Standards Board issued Emerging Issues Task Force
(referred to as EITF) Issue No. 00-21, ""Revenue Arrangements with Multiple Deliverables.'' EITF Issue
No. 00-21 addresses certain aspects of the accounting by a company for arrangements under which it will
perform multiple revenue-generating activities. EITF Issue No. 00-21 addresses when and how an arrange-
ment involving multiple deliverables should be divided into separate units of accounting. EITF Issue
No. 00-21 provides guidance with respect to the eÅect of certain customer rights due to company
nonperformance on the recognition of revenue allocated to delivered units of accounting. EITF Issue
No. 00-21 also addresses the impact on the measurement and/or allocation of arrangement consideration of
customer cancellation provisions and consideration that varies as a result of future actions of the customer or
the company. Finally, EITF Issue No. 00-21 provides guidance with respect to the recognition of the cost of
certain deliverables that are excluded from the revenue accounting for an arrangement. The provisions of
EITF Issue No. 00-21 applied to revenue arrangements entered into in Ñscal periods beginning after June 15,
2003. The eÅect that the adoption of EITF Issue No. 00-21 did not have a material eÅect on the Company's
Consolidated Financial Statements for the Ñscal year ended December 28, 2003.
Note 2: Financial Instruments
Concentration of Credit Risk
The Company's concentration of credit risk consists principally of cash, cash equivalents, short-term
investments and trade receivables. The Company's investment policy restricts investments to high-credit
quality investments and limits the amounts invested with any one issuer. The Company sells to original
equipment manufacturers, retailers and distributors in the United States, Japan, Europe and the Far East,
performs ongoing credit evaluations of its customers' Ñnancial condition, and generally requires no collateral.
Reserves are maintained for potential credit losses.
OÅ Balance Sheet Risk
In March 2002, FlashVision exercised its right of early termination under its lease facility with ABN
AMRO Bank, N.V., or ABN AMRO, and in April 2002 repaid all amounts outstanding there under.
FlashVision secured a new equipment lease arrangement of approximately 37.9 billion Japanese Yen (or
approximately $305 million based on the exchange rate in eÅect on the date the agreement was executed) in
May 2002 with Mizuho Corporate Bank, Ltd., or Mizuho, and certain other Ñnancial institutions. Under the
terms of the new lease, Toshiba is required to provide a guarantee to these Ñnancial institutions on behalf of
FlashVision. The Company agreed to indemnify Toshiba in certain circumstances for certain liabilities
Toshiba incurs as a result of Toshiba's guarantee of the FlashVision equipment lease arrangement. If
FlashVision fails to meet its lease commitments, and Toshiba fulÑlls these commitments under the terms of
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