Seagate 2015 Annual Report Download - page 72
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SEAGATETECHNOLOGYPLC
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued)
Cashequivalentsarecarriedatcost,whichapproximatesfairvalue.TheCompany'sshort-terminvestmentsareprimarilycomprisedofmoneymarketfunds,
certificatesofdeposits,andotherinterest-bearingbankdeposits.TheCompanyhasclassifieditsmarketablesecuritiesasavailable-for-saleandtheyarestatedat
fairvaluewithunrealizedgainsandlossesincludedinAccumulatedothercomprehensiveincome(loss),whichisacomponentofShareholders'Equity.The
Companyevaluatestheavailable-forsalesecuritiesinanunrealizedlosspositionforother-than-temporaryimpairment.Realizedgainsandlossesareincludedin
Other,net.Thecostofsecuritiessoldisbasedonthespecificidentificationmethod.
RestrictedCashandInvestments.Restrictedcashandinvestmentsrepresentcashandcashequivalentsandinvestmentsthatarerestrictedastowithdrawal
oruseforotherthancurrentoperations.
AllowancesforDoubtfulAccounts.TheCompanymaintainsanallowanceforuncollectibleaccountsreceivablebaseduponexpectedcollectability.This
reserveisestablishedbaseduponhistoricaltrends,globalmacroeconomicconditionsandananalysisofspecificexposures.Theprovisionfordoubtfulaccountsis
recordedasachargetoMarketingandadministrativeexpense.
Inventory.Inventoriesarevaluedatthelowerofcost(usingthefirst-in,first-outmethod)ormarket.Marketvalueisbaseduponanestimatedaverage
sellingpricereducedbyestimatedcostofcompletionanddisposal.
Property,EquipmentandLeaseholdImprovements.Property,equipmentandleaseholdimprovementsarestatedatcost.Equipmentandbuildingsare
depreciatedusingthestraight-linemethodovertheestimatedusefullivesoftheassets.Leaseholdimprovementsareamortizedusingthestraight-linemethodover
theshorteroftheestimatedlifeoftheassetortheremainingtermofthelease.Thecostsofadditionsandsubstantialimprovementstoproperty,equipmentand
leaseholdimprovements,whichextendtheeconomiclifeoftheunderlyingassets,arecapitalized.Thecostofmaintenanceandrepairstoproperty,equipmentand
leaseholdimprovementsareexpensedasincurred.
AssessmentofGoodwillandOtherLong-livedAssetsforImpairment.TheCompanyaccountsforgoodwillinaccordancewithAccountingStandards
Codification("ASC")Topic350("ASC350"),Intangibles—GoodwillandOther.Duringfiscalyear2012,theCompanyadoptedAccountingStandardUpdate
("ASU")No.2011-08,Intangibles—GoodwillandOther(ASCTopic350)—TestingGoodwillforImpairment.TheCompanyperformsaqualitativeassessmentin
thefourthquarterofeachyear,ormorefrequentlyifindicatorsofpotentialimpairmentexist,todetermineifanyeventsorcircumstancesexist,suchasanadverse
changeinbusinessclimateoradeclineintheoverallindustrythatwouldindicatethatitwouldmorelikelythannotreducethefairvalueofareportingunitbelow
itscarryingamount,includinggoodwill.Ifitisdeterminedinthequalitativeassessmentthatthefairvalueofareportingunitismorelikelythannotbelowits
carryingamount,includinggoodwill,thentheCompanyperformsaquantitativetwo-stepimpairmenttest.Thefirststep,identifyingapotentialimpairment,
comparesthefairvalueofareportingunitwithitscarryingamount,includinggoodwill.Ifthecarryingvalueofthereportingunitexceedsitsfairvalue,thesecond
stepwouldneedtobeconducted.Thesecondstep,measuringtheimpairmentloss,comparestheimpliedfairvalueofthereportingunitgoodwillwiththecarrying
amountofthatgoodwill.Anyexcessofthereportingunitgoodwillcarryingvalueoveritsimpliedfairvalueisrecognizedasanimpairmentloss.
TheCompanytestsotherlong-livedassets,includingproperty,equipmentandleaseholdimprovementsandotherintangibleassetssubjecttoamortization,for
recoverabilitywhenevereventsorchangesincircumstancesindicatethatthecarryingvalueofthoseassetsmaynotberecoverable.TheCompanyperformsa
recoverabilitytesttoassesstherecoverabilityofanassetgroup.Iftherecoverabilitytestindicatesthatthecarryingvalueoftheassetgroupisnotrecoverable,the
Companywillestimatethe
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