Seagate 2014 Annual Report Download - page 62
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tonewshipments(exclusiveoftheimpactofre-estimatesofpre-existingliabilities)were1.1%,1.3%and1.3%respectively,forthesameperiods.Changesin
anticipatedfailureratesofspecificproductsandsignificantchangesinrepairorreplacementcostshavehistoricallybeenthemajorreasonsforsignificantchanges
inpriorestimates.Anyfuturechangesinfailureratesofcertainproducts,aswellaschangesinrepaircostsorthecostofreplacementparts,mayresultinincreased
ordecreasedwarrantyaccruals.
AccountingforIncomeTaxes.WeaccountforincometaxespursuanttoAccountingStandardsCodification(ASC)Topic740(ASC740),IncomeTaxes.In
applying,ASC740,wemakecertainestimatesandjudgmentsindeterminingincometaxexpenseforfinancialstatementpurposes.Theseestimatesandjudgments
occurinthecalculationoftaxcredits,recognitionofincomeanddeductionsandcalculationofspecifictaxassetsandliabilities,whicharisefromdifferencesinthe
timingofrecognitionofrevenueandexpensefortaxandfinancialstatementpurposes,aswellastaxliabilitiesassociatedwithuncertaintaxpositions.The
calculationoftaxliabilitiesinvolvesuncertaintiesintheapplicationofcomplextaxrulesandthepotentialforfutureadjustmentofouruncertaintaxpositionsby
theInternalRevenueServiceorothertaxjurisdictions.Ifestimatesofthesetaxliabilitiesaregreaterorlessthanactualresults,anadditionaltaxbenefitor
provisionwillresult.ThedeferredtaxassetswerecordeachperioddependprimarilyonourabilitytogeneratefuturetaxableincomeintheUnitedStatesand
certainnon-U.S.jurisdictions.Eachperiod,weevaluatetheneedforavaluationallowanceforourdeferredtaxassetsand,ifnecessary,weadjustthevaluation
allowancesothatnetdeferredtaxassetsarerecordedonlytotheextentweconcludeitismorelikelythannotthatthesedeferredtaxassetswillberealized.Ifour
outlookforfuturetaxableincomechangessignificantly,ourassessmentoftheneedforavaluationallowancemayalsochange.
AssessingGoodwillandOtherLong-livedAssetsforImpairment.WeaccountforgoodwillinaccordancewithASCTopic350,Intangibles—Goodwilland
Other.AspermittedbyASC350,weperformaqualitativeassessmentinthefourthquarterofeachyear,ormorefrequentlyifindicatorsofpotentialimpairment
exist,todetermineifanyeventsorcircumstancesexist,suchasanadversechangeinbusinessclimateoradeclineintheoverallindustrythatwouldindicatethatit
wouldmorelikelythannotreducethefairvalueofareportingunitbelowitscarryingamount.Basedonthequalitativeassessment,ifitisnotmorelikelythannot
thatthefairvalueofareportingunitislessthanitscarryingamount,thentheCompanyisnotrequiredtoperformthetwo-stepgoodwillimpairmenttest.Ifitis
determinedinthequalitativeassessmentthatthefairvalueofareportingunitismorelikelythannotbelowitscarryingamount,includinggoodwill,thenwe
performaquantitativetwo-stepimpairmenttest.Thefirststep,identifyingapotentialimpairment,comparesthefairvalueofareportingunitwithitscarrying
amount,includinggoodwill.Ifthecarryingvalueofthereportingunitexceedsitsfairvalue,thesecondstepwouldneedtobeconducted.Thesecondstep,
measuringtheimpairmentloss,comparestheimpliedfairvalueofthereportingunitgoodwillwiththecarryingamountofthatgoodwill.Anyexcessofthe
reportingunitgoodwillcarryingvalueoveritsimpliedfairvalueisrecognizedasanimpairmentloss.
InaccordancewithASC360-05-4,ImpairmentorDisposalofLong-livedAssets,wetestotherlong-livedassets,includingproperty,equipmentandleasehold
improvementsandotherintangibleassetssubjecttoamortization,forrecoverabilitywhenevereventsorchangesincircumstancesindicatethatthecarryingvalues
ofthoseassetsmaynotberecoverable.Weassesstherecoverabilityofanassetgroupbydeterminingifthecarryingvalueoftheassetgroupexceedsthesumofthe
projectedundiscountedcashflowsexpectedtoresultfromtheuseandeventualdispositionoftheassetsovertheremainingeconomiclifeoftheprimaryassetinthe
assetgroup.Iftherecoverabilitytestindicatesthatthecarryingvalueoftheassetgroupisnotrecoverable,wewillestimatethefairvalueoftheassetgroupand
compareittoitscarryingvalue.Theexcessofthecarryingvalueoverthefairvalueisallocatedproratatoderivetheadjustedcarryingvalueofeachassetinthe
assetgroup.Theadjustedcarryingvalueofeachassetintheassetgroupisnotreducedbelowitsfairvalue.
RecentAccountingPronouncements
See"Item8.FinancialStatementsandSupplementaryData-Note1.BasisofPresentationandSummaryofSignificantAccountingPolicies"forinformation
regardingtheeffectofnewaccountingpronouncementsonourfinancialstatements.
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