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Unformatted text preview: For derivatives that are designated as fair value hedges, hedge ineffectiveness is measured by calculating the periodic change in the fair value of the
hedge contract and the periodic change in the fair value of the hedged item. To the extent that these fair value changes do not fully offset each other,
the difference is recorded as ineffectiveness in earnings as a component of interest and other, net.
For derivatives that are not designated as hedges or do not qualify for hedge accounting treatment, Dell recognizes the change in the instrument's fair
value currently in earnings as a component of interest and other, net.
Cash flows from derivative instruments are presented in the same category on the Consolidated Statements of Cash Flows as the cash flows from the
underlying hedged items. See Note 6 of Notes to Consolidated Financial Statements for a full description of Dell's derivative financial instrument
Treasury Stock — Dell accounts for treasury stock under the cost method and includes treasury stock as a component of stockholders' equity.
Revenue Recognition — Net revenues include sales of hardware, software and peripherals, and services. Dell recognizes revenue for these products
when it is realized or realizable and earned. Revenue is considered realized and earned when persuasive evidence of an arrangement exists; delivery
has occurred or services have been rendered; Dell's fee to its customer is fixed and determinable; and collection of the resulting receivable is
reasonably assured. Dell classifies revenue and cost of revenue related to standalone software sold with Post Contract Support ("PCS") in the same
line item as services on the Consolidated Statements of Income. Services revenue and cost of services revenue captions on the Consolidated
Statements of Income include Dell's services and software from Dell's software and peripherals product category. This software revenue and related
costs include software license fees and related PCS that is sold separately from computer systems through Dell's software and peripherals pr...
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This document was uploaded on 02/22/2014 for the course ACCT 6330 at University of Texas at Dallas, Richardson.
- Spring '11