Seagate 2014 Annual Report Download - page 73

TableofContents
SEAGATETECHNOLOGYPLC
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued)
requiredtorenderserviceuntiltheyareterminatedinordertoreceivetheterminationbenefits.Ifemployeesarerequiredtorenderserviceuntiltheyareterminated
inordertoreceivetheterminationbenefits,aliabilityisrecognizedratablyoverthefutureserviceperiod.Otherwise,aliabilityisrecognizedwhenmanagement
hascommittedtoarestructuringplanandhascommunicatedthoseactionstoemployees.Employeeterminationbenefitscoveredbyexistingbenefitarrangements
arerecordedinaccordancewithASCTopic712,Non-retirementPostemploymentBenefits.Thesecostsarerecognizedwhenmanagementhascommittedtoa
restructuringplanandtheseverancecostsareprobableandestimable.
AdvertisingExpense.Thecostofadvertisingisexpensedasincurred.Advertisingcostswereapproximately$64million,$52millionand$51millionin
fiscalyears2015,2014and2013,respectively.
Stock-BasedCompensation.TheCompanyaccountsforstock-basedcompensationundertheprovisionsofASCTopic718(ASC718),Compensation-Stock
Compensation.TheCompanyhaselectedtoapplythewith-and-withoutmethodtoassesstherealizationofrelatedexcesstaxbenefits.
AccountingforIncomeTaxes.TheCompanyaccountsforincometaxespursuanttoASCTopic740(ASC740),IncomeTaxes.InapplyingASC740,the
Companymakescertainestimatesandjudgmentsindeterminingincometaxexpenseforfinancialstatementpurposes.Theseestimatesandjudgmentsoccurinthe
calculationoftaxcredits,recognitionofincomeanddeductionsandcalculationofspecifictaxassetsandliabilities,whicharisefromdifferencesinthetimingof
recognitionofrevenueandexpenseforincometaxandfinancialstatementpurposes,aswellastaxliabilitiesassociatedwithuncertaintaxpositions.The
calculationoftaxliabilitiesinvolvesuncertaintiesintheapplicationofcomplextaxrulesandthepotentialforfutureadjustmentoftheCompany'suncertaintax
positionsbytheInternalRevenueServiceorothertaxjurisdictions.Ifestimatesofthesetaxliabilitiesaregreaterorlessthanactualresults,anadditionaltax
benefitorprovisionwillresult.ThedeferredtaxassetstheCompanyrecordseachperioddependprimarilyontheCompany'sabilitytogeneratefuturetaxable
incomeintheUnitedStatesandcertainnon-U.S.jurisdictions.Eachperiod,theCompanyevaluatestheneedforavaluationallowanceforitsdeferredtaxassets
and,ifnecessary,adjuststhevaluationallowancesothatnetdeferredtaxassetsarerecordedonlytotheextenttheCompanyconcludesitismorelikelythannot
thatthesedeferredtaxassetswillberealized.IftheCompany'soutlookforfuturetaxableincomechangessignificantly,theCompany'sassessmentoftheneedfor,
andtheamountof,avaluationallowancemayalsochange.
ComprehensiveIncome.TheCompanypresentscomprehensiveincomeinaseparatestatement.Comprehensiveincomeiscomprisedofnetincomeand
othergainsandlossesaffectingequitythatareexcludedfromnetincome.
ForeignCurrencyRemeasurementandTranslation.TheU.S.dollaristhefunctionalcurrencyforthemajorityoftheCompany'sforeignoperations.
Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesareremeasuredintothefunctionalcurrencyofthesubsidiaryatthebalancesheetdate.Thegains
andlossesfromtheremeasurementofforeigncurrencydenominatedbalancesintothefunctionalcurrencyofthesubsidiaryareincludedinOther,netonthe
Company'sConsolidatedStatementsofOperations.
TheCompanytranslatestheassetsandliabilitiesofitsnon-U.S.dollarfunctionalcurrencysubsidiariesintoU.S.dollarsusingexchangeratesineffectatthe
endofeachperiod.Revenueandexpensesforthesesubsidiariesaretranslatedusingratesthatapproximatethoseineffectduringtheperiod.Gainsandlossesfrom
thesetranslationsarerecognizedinforeigncurrencytranslationincludedinAccumulatedOthercomprehensiveincome(loss),whichisacomponentof
shareholders'equity.TheCompany'ssubsidiariesthatusetheU.S.dollarastheirfunctionalcurrencyremeasuremonetaryassetsandliabilitiesatexchangeratesin
effectattheendofeachperiod,andinventories,property,andnonmonetary
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