Seagate 2009 Annual Report Download - page 80

Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In accordance with ASC 360-10-20, Property, Plant, and Equipment—Impairment or Disposal of Long-lived Assets (previously SFAS
No. 144,
Accounting for the Impairment or Disposal of Long-lived Assets ), the Company tests other long-lived assets, including property,
equipment and leasehold improvements and other intangible assets subject to amortization, for recoverability whenever events or changes in
circumstances indicate that the carrying value of those assets may not be recoverable. The Company assesses the recoverability of an asset group
by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use
and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates
that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group using the same
approaches indicated above for ASC 350 step two and compare it to its carrying value. The excess of the carrying value over the fair value is
allocated pro rata to derive the adjusted carrying value of assets in the asset group. The adjusted carrying value of each asset in the asset group is
not reduced below its fair value.
Basis of Presentation and Consolidation
The consolidated financial statements include the accounts of the Company and all its wholly-owned subsidiaries, after elimination of
intercompany transactions and balances. The consolidated financial statements reflect, in the opinion of management, all material adjustments
necessary to present fairly the consolidated financial position, results of operations, cash flows and shareholders' equity for the periods presented.
The Company operates and reports financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. Accordingly,
fiscal year 2010 was comprised of 52 weeks and ended on July 2, 2010. Fiscal year 2009 was comprised of 53 weeks and ended on July 3, 2009.
Fiscal year 2008 was comprised of 52 weeks and ended on June 27, 2008. All references to years in these Notes to Consolidated Financial
Statements represent fiscal years unless otherwise noted. Fiscal year 2011 will be 52 weeks and will end on July 1, 2011.
Cash, Cash Equivalents and Short-Term Investments. The Company considers all highly liquid investments with a remaining maturity of
90 days or less at the time of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The
Company's short-term investments are primarily comprised of readily marketable debt securities with remaining maturities of more than 90 days
at the time of purchase. With the exception of restricted cash and investments, the Company has classified its entire investment portfolio as
available-for-sale and it is stated at fair value with unrealized gains and losses included in Accumulated other comprehensive income (loss),
which is a component of Shareholders' Equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of
discounts to maturity. Such amortization and accretion are included in interest income. Realized gains and losses are included in Other, net. The
cost of securities sold is based on the specific identification method.
Restricted Cash and Investments. Restricted cash and investments represents cash and investments that are restricted as to withdrawal or
use for other than current operations (see Note 2).
Allowances for Doubtful Accounts. The Company maintains an allowance for uncollectible accounts receivable based upon expected
collectibility. This reserve is established based upon historical trends, global macroeconomic conditions and an analysis of specific exposures.
The provision for doubtful accounts is recorded as a charge to general and administrative expense (see Note 2).
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