Stock options impact on financial statements
Significant Accounting Policies Accounting principles. The financial financial are prepared on a basis consistent with U. The financial statements include the accounts of Microsoft and its subsidiaries. Significant intercompany transactions and balances have been eliminated. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Examples include provisions for returns and bad debts and the length of product life cycles and buildings' lives. Actual results may differ from these estimates. Assets and liabilities recorded in foreign currencies on the books of foreign subsidiaries are translated at the exchange rate on the balance sheet date. Translation adjustments resulting from this process are charged or credited to equity. Revenues, costs, and expenses are translated at average rates of exchange prevailing during the year. Gains and losses on foreign currency transactions are included in nonoperating expenses. Revenue from sales to distributors and resellers is recognized when related products are shipped. Revenue from corporate license programs generally is recognized when the user installs the product. Revenue attributable to significant support telephone support and unspecified enhancements such as service packs and Internet browser updates is recognized ratably statements the options life cycle, which may exceed one year. Costs related to insignificant obligations, which include telephone support for certain products, are accrued. Revenue from products licensed to original equipment manufacturers is recognized when the OEM ships the licensed products. Provisions are recorded for returns and bad debts. Research and development costs are expensed as incurred. Telephone support costs are included in sales and marketing. Income tax expense includes U. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effect of this difference is reported as deferred income taxes. Tax credits are accounted for as a reduction financial tax expense in the year in which the credits reduce taxes payable. Earnings per share is computed on the basis of the weighted average number of common shares outstanding plus the effect of outstanding stock options, computed using the treasury stock method. The Company considers all liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. Short-term investments generally mature between three months and five years from the purchase date. All statements and short-term investments are classified as available for sale and are recorded at market. Cost approximates market for all classifications of cash and short-term investments; realized and unrealized gains and losses are reflected in stockholders' equity and are not material. Equity securities are recorded at market in other assets; unrealized gains and losses are reflected in stockholders' equity and are not material. Property, plant, and equipment. Property, plant, and equipment is stated at cost and depreciated using the straight-line method over the shorter of the estimated life of stock asset or the lease term, ranging from one to 30 years. The Company's investment portfolio is diversified and consists primarily of short-term investment grade securities. Finished goods sales to international customers in Europe, Japan, Australia, and Canada are primarily billed in local currencies. Payment cycles are relatively short, generally less than 90 days. European manufacturing costs and international selling, distribution, and support costs are generally disbursed in local currencies. Local currency cash balances in excess of short-term operating needs are generally converted into U. Therefore, foreign exchange rate fluctuations generally do not create a risk of material transaction gains or losses. As a result, Microsoft's hedging activities for transaction exposures have been minimal. No material hedge contracts were outstanding at June 30, Foreign exchange rates affect the translated results of operations of the Company's foreign subsidiaries. Impact, and forthe Company hedged a percentage of planned translated international finished goods revenues by purchasing options on the applicable currencies. Premiums paid for the options were not material. Certain reclassifications have been made for consistent presentation. Cash and Short-Term Investments. Income Taxes The provision for income taxes consisted of: Income taxes have been settled with the Internal Revenue Service for all years through The IRS concluded its field examination of the Company's U. Management believes any related adjustments that might be required will not be material to the financial statements. Shares of common stock outstanding were as follows: The Company repurchases its common stock in the open market to provide shares for issuing to employees under stock option and stock purchase plans. The Company's Board of Directors authorized continuation of this program in Put Warrants To enhance its stock repurchase program, the Company sold put warrants to independent third parties during and These put warrants entitle the holders to sell shares of Microsoft common stock to the Company at specified prices, are exercisable only at maturity, and are settleable in cash at Microsoft's option. On June 30, and There was no impact on earnings per share in or Employee Stock and Savings Plans Employee stock purchase plan. The Company has an employee stock purchase plan for all impact employees. During, andemployees purchased 2. At June 30,2. Impact Company has a savings plan, which qualifies stock Section k of the Internal Revenue Code. Under the plan, participating U. The Company has stock option plans for directors, officers, and all employees, which provide for nonqualified and incentive stock options. The Board of Directors determines the option price not to be less than fair market value for incentive options at the date of grant. Options granted prior to generally vest over four and one-half years and expire ten years from the date of grant. Options granted during and after generally vest over four and one-half years and expire seven years from the date of grant, while certain options vest over seven and one-half years and expire after ten years. At June 30,options for Duringa wholly owned subsidiary of Tele-Communications, Inc. Commitments and Contingencies The Company has operating leases for most U. Future minimum rental commitments under noncancelable leases, in millions of dollars, are: Financial connection with the Company's communication infrastructure and the operation of The Microsoft Network, Microsoft has certain communication usage commitments. Future related minimum commitments, in millions of dollars, are: DuringMicrosoft and National Broadcasting Company NBC established two MSNBC joint ventures: Microsoft is subject to various legal proceedings statements claims that stock in the ordinary course of business. Management currently believes that resolving these matters will not have a material adverse impact on the Company's financial position or its options of operations. Intercompany sales between geographic areas are accounted for at prices representative of unaffiliated party transactions. Exports and options OEM transactions are primarily in U. Quarter Ended In millions. The Company's common stock is traded on The Nasdaq Stock Market under the symbol MSFT. On July 31,there were 37, holders of record of the Company's common stock. The Company has not paid cash dividends on its common stock.
The weakest of all intermolecular forces is between two induced dipoles.
This ensures that our writers will be able to deliver precisely what you need.