SanDisk 2014 Annual Report Download - page 153

SANDISK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
criteria are classified as a reduction to revenue when the expense is incurred. Advertising expenses
recorded as marketing expense were $27.9 million, $19.6 million and $16.2 million in fiscal years 2014, 2013
and 2012, respectively.
Research and Development Expenses. Research and development (‘‘R&D’’) expenditures are expensed as
incurred.
Note 2. Recent Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards
Update (‘‘ASU’’) No. 2014-15, ‘‘Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going
Concern,’’ to provide guidance on management’s responsibility in evaluating whether there is substantial
doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures.
The Company expects to adopt ASU 2014-15 in fiscal year 2016 and the Company does not expect the
adoption of ASU 2014-15 to have a significant impact on its Consolidated Financial Statements or related
disclosures.
In May 2014, the FASB issued ASU No. 2014-09, ‘‘Revenue from Contracts with Customers.’’ Under
this guidance, an entity is required to recognize revenue upon transfer of promised goods or services to
customers, in an amount that reflects the expected consideration received in exchange for those goods or
services. As such, an entity will need to use more judgment and make more estimates than under the
current guidance. This standard becomes effective and will be adopted in the first quarter of fiscal year
2017 with early adoption not permitted. Under application of the existing guidance, the Company’s sales
made to distributors and retailers are generally deferred until the distributors or retailers sell the
merchandise to their end customer. Under the new standard, the Company’s sales made to distributors and
retailers are expected to be recognized upon transfer of inventory to the distributor or retailer resulting in
earlier revenue recognition than per existing guidance with additional use of estimation. In addition, the
timing of the Company’s revenue relating to the licensing of IP could materially change. The Company is
currently evaluating the appropriate transition method and any further impact of this guidance on its
Consolidated Financial Statements and related disclosures.
During the third quarter of fiscal year 2014, the Company early adopted the FASB accounting
guidance ASU No. 2014-08, ‘‘Presentation of Financial Statements and Property, Plant and Equipment,’’
which raises the threshold for a disposal to qualify as a discontinued operation and requires new
disclosures of both discontinued operations and certain other disposals that do not meet the new definition
of a discontinued operation. It also allows an entity to present a discontinued operation even when it has
continuing cash flows and significant continuing involvement with the disposed component. The Company
determined that the adoption of this ASU did not have any impact on the Company’s Consolidated
Financial Statements or related disclosures.
F-13
Annual Report