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0000320193
20100125
10-K/A
409
Intercompany accounts and transactions have been eliminated.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
410
The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
411
Actual results could differ materially from those estimates.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
412
Certain prior year amounts in the consolidated financial statements and notes thereto have been reclassified to conform to the current year’s presentation.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
413
During the first quarter of 2009, the Company reclassified $2.4 billion of certain fixed-income securities from short-term marketable securities to long-term marketable securities in the September 27, 2008 Consolidated Balance Sheet.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
414
The reclassification resulted from a change in accounting presentation for certain investments based on contractual maturity dates, which more closely reflects the Company’s assessment of the timing of when such securities will be converted to cash.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
415
As a result of this change, marketable securities with maturities less than 12 months are classified as short-term and marketable securities with maturities greater than 12 months are classified as long-term.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
416
There have been no changes in the Company’s investment policies or practices associated with this change in accounting presentation.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
417
See Note 3, “Financial Instruments” of this Form 10-K for additional information.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
418
The Company’s fiscal year is the 52 or 53-week period that ends on the last Saturday of September.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
419
The Company’s fiscal years 2009, 2008 and 2007 ended on September 26, 2009, September 27, 2008 and September 29, 2007, respectively, and included 52 weeks each.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
420
An additional week is included in the first fiscal quarter approximately every six years to realign fiscal quarters with calendar quarters.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
421
Unless otherwise stated, references to particular years or quarters refer to the Company’s fiscal years ended in September and the associated quarters of those fiscal years.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
422
In May 2009, the Financial Accounting Standards Board (“FASB”) established general accounting standards and disclosure for subsequent events.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
423
The Company adopted FASB Accounting Standards Codification (“ASC”) 855, Subsequent Events (formerly referenced as Statement of Financial Accounting Standards (“SFAS”) No.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
424
165, Subsequent Events), during the third quarter of 2009.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
425
The Company has evaluated subsequent events through the date and time the financial statements were originally issued on October 27, 2009.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
426
The Company has further evaluated subsequent events for disclosure only through the date and time the financial statements were reissued on January 25, 2010.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
427
Retrospective Adoption of New Accounting Principles In September 2009, the FASB amended the accounting standards related to revenue recognition for arrangements with multiple deliverables and arrangements that include software elements (“new accounting principles”).
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
428
The Company adopted the new accounting principles on a retrospective basis during the first quarter of 2010.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
429
Under the historical accounting principles, the Company was required to account for sales of both iPhone and Apple TV using subscription accounting because the Company indicated it might from time-to-time provide future unspecified software upgrades and features for those products free of charge.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
430
Under subscription accounting, revenue and associated product cost of sales for iPhone and Apple TV were deferred at the time of sale and recognized on a straight-line basis over each product’s estimated economic life.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
431
This resulted in the deferral of significant amounts of revenue and cost of sales related to iPhone and Apple TV.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
432
The new accounting principles generally require the Company to account for the sale of both iPhone and Apple TV as two deliverables.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
433
The first deliverable is the hardware and software essential to the functionality of the hardware device delivered at the time of sale, and the second deliverable is the right included with the purchase of iPhone and Apple TV to receive on a when-and-if-available basis future unspecified software upgrades and features ...
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
434
The new accounting principles result in the recognition of substantially all of the revenue and product costs from the sales of iPhone and Apple TV at the time of sale.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
435
Additionally, the Company is required to estimate a standalone selling price for the unspecified software upgrade rights included with the sale of iPhone and Apple TV and recognizes that amount ratably over the 24-month estimated life of the related hardware device.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
436
The financial statements and notes to the financial statements presented herein have been adjusted to reflect the retrospective adoption of the new accounting principles.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
437
Refer to the “Explanatory Note” immediately preceding Part II, Item 6 and Note 2, “Retrospective Adoption of New Accounting Principles” in this Form 10-K for additional information on the impact of adoption.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
438
Financial Instruments Cash Equivalents and Marketable Securities All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
439
The Company’s debt and marketable equity securities have been classified and accounted for as available-for-sale.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
440
Management determines the appropriate classification of its investments in debt securities at the time of purchase and reevaluates the available-for-sale designations as of each balance sheet date.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
441
The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
442
Marketable securities with maturities of less than 12 months are classified as short-term and marketable securities with maturities greater than 12 months are classified as long-term.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
443
These securities are carried at fair value, with the unrealized gains and losses, net of taxes, reported as a component of shareholders’ equity.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
444
The cost of securities sold is based upon the specific identification method.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
445
Derivative Financial Instruments During the second quarter of 2009, the Company adopted FASB ASC 815, Derivatives and Hedging (formerly referenced as SFAS No.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
446
161, Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
447
133), which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedged item affect the financial statements.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
448
The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
449
Derivatives that are not defined as hedges must be adjusted to fair value through earnings.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
450
For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income in shareholders’ equity and reclassified in...
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
451
The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
452
To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
453
For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
454
For derivative instruments that hedge the exposure to changes in the fair value of an asset or a liability and that are designated as fair value hedges, the net gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in earnings ...
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
455
The Company did not have a net gain or loss on these derivative instruments during 2009, 2008 and 2007.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
456
The net gain or loss on the effective portion of a derivative instrument that is designated as an economic hedge of the foreign currency translation exposure of the net investment in a foreign operation is reported in the same manner as a foreign currency translation adjustment.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
457
For forward exchange contracts designated as net investment hedges, the Company excludes changes in fair value relating to changes in the forward carry component from its definition of effectiveness.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
458
Accordingly, any gains or losses related to this component are recognized in current earnings.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
459
Fair Value Measurements During the first quarter of 2009, the Company adopted FASB ASC 820, Fair Value Measurements and Disclosures (formerly referenced as SFAS No.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
460
157, Fair Value Measurements), which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
461
This new accounting standard does not require any new fair value measurements.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
462
The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
463
The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
464
When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricin...
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
465
During the first quarter of 2009, the Company adopted FASB ASC 825, Financial Instruments (formerly referenced as SFAS No.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
466
159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
467
115), which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
468
The Company has not elected the fair value option for any eligible financial instruments.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
469
Inventories Inventories are stated at the lower of cost, computed using the first-in, first-out method, or market.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
470
If the cost of the inventories exceeds their market value, provisions are made currently for the difference between the cost and the market value.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
471
The Company’s inventories consist primarily of finished goods for all periods presented.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
472
Property, Plant and Equipment Property, plant and equipment are stated at cost.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
473
Depreciation is computed by use of the straight-line method over the estimated useful lives of the assets, which for buildings is the lesser of 30 years or the remaining life of the underlying building, up to five years for equipment, and the shorter of lease terms or ten years for leasehold improvements.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
474
The Company capitalizes eligible costs to acquire or develop internal-use software that are incurred subsequent to the preliminary project stage.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
475
Capitalized costs related to internal-use software are amortized using the straight-line method over the estimated useful lives of the assets, which range from three to five years.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
476
Depreciation and amortization expense on property and equipment was $606 million, $387 million and $259 million during 2009, 2008 and 2007, respectively.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
477
Asset Retirement Obligations The Company records obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
478
The Company reviews legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the assets.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
479
If it is determined that a legal obligation exists, the fair value of the liability for an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
480
The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
481
The difference between the gross expected future cash flow and its present value is accreted over the life of the related lease as an operating expense.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
482
All of the Company’s existing asset retirement obligations are associated with commitments to return property subject to operating leases to original condition upon lease termination.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
483
The Company’s asset retirement liability was $25 million and $21 million as of September 26, 2009 and September 27, 2008, respectively.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
484
Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets The Company reviews property, plant and equipment and certain identifiable intangibles, excluding goodwill, for impairment.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
485
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
486
Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
487
If property, plant and equipment and certain identifiable intangibles are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair market value.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
488
The Company did not record any material impairments during 2009, 2008 and 2007.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
489
The Company does not amortize goodwill and intangible assets with indefinite useful lives, rather such assets are required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that the assets may be impaired.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
490
The Company performs its goodwill and intangible asset impairment tests on or about August 31 of each year.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
491
The Company did not recognize any goodwill or intangible asset impairment charges in 2009, 2008 and 2007.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
492
The Company established reporting units based on its current reporting structure.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
493
For purposes of testing goodwill for impairment, goodwill has been allocated to these reporting units to the extent it relates to each reporting unit.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
494
The Company amortizes its intangible assets with definite lives over their estimated useful lives and reviews these assets for impairment.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
495
The Company is currently amortizing its acquired intangible assets with definite lives over periods ranging from one to ten years.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
496
Foreign Currency Translation and Remeasurement 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.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
497
Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
498
Gains and losses from these translations are credited or charged to foreign currency translation included in accumulated other comprehensive income in shareholders’ equity.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
499
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 assets and liabilities at historical rates.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
500
Gains and losses from these remeasurements were insignificant and have been included in the Company’s results of operations.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
501
Revenue Recognition Net sales consist primarily of revenue from the sale of hardware, software, digital content and applications, peripherals, and service and support contracts.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
502
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
503
Product is considered delivered to the customer once it has been shipped and title and risk of loss have been transferred.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
504
For most of the Company’s product sales, these criteria are met at the time the product is shipped.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
505
For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers revenue until the customer receives the product because the Company legally retains a portion of the risk of loss on these sales during transit.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
506
The Company recognizes revenue from the sale of hardware products (e.g., Mac computers, iPhones, iPods and peripherals), software bundled with hardware that is essential to the functionality of the hardware, and third-party digital content sold on the iTunes Store in accordance with general revenue recognition accounti...
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
507
The Company recognizes revenue in accordance with industry specific software accounting guidance for the following types of sales transactions: (i) standalone sales of software products, (ii) sales of software upgrades and (iii) sales of software bundled with hardware not essential to the functionality of the hardware.
0001193125-10-012091/full-submission.txt
0000320193
20100125
10-K/A
508
Revenue from service and support contracts is deferred and recognized ratably over the service coverage periods.
0001193125-10-012091/full-submission.txt