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We first use qualitative factors to determine whether goodwill is more likely than not impaired. If we conclude
from the qualitative assessment that goodwill is more likely than not impaired, we follow a two-step approach to
quantify the impairment.
We are required to use judgment when applying the goodwill impairment test, including the identification of
reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and
determination of the fair value of each reporting unit. In addition, the estimates used to determine the fair value of
each reporting unit may change based on results of operations, macroeconomic conditions or other factors. Changes in
these estimates could materially affect our assessment of the fair value and goodwill impairment for each reporting
unit.
Other intangible assets consist primarily of technology acquired in business combinations and in-process research
and development. In-process research and development is not amortized. Instead, it is tested for impairment on an
annual basis or more frequently whenever events or changes in circumstances indicate that it may be impaired.
Acquired intangibles are amortized on a straight-line basis over their respective estimated useful lives. Long-lived
assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts
may not be recoverable. If impairment is indicated, the impairment is measured as the amount by which the carrying
amount of the assets exceeds the fair value of the assets.
Recent Accounting Pronouncements
For a description of recently issued and adopted accounting pronouncements, including the respective dates of
adoption and expected effects on our results of operations and financial condition, refer to Part II, Item 8, Note 1 of
the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, which is incorporated
by reference in response to this item.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Disclosure About Foreign Currency Risk
Although the majority of our transactions are in U.S. dollars, some transactions are based in various foreign cur-
rencies. We purchase short-term, foreign exchange contracts to hedge the impact of foreign currency exchange
fluctuations on certain underlying assets, revenue, liabilities and commitments for operating expenses and product
costs denominated in foreign currencies. The purpose of entering into these hedge transactions is to minimize the
impact of foreign currency fluctuations on our results of operations. The contract maturity dates do not exceed
12 months. We do not purchase foreign exchange contracts for trading purposes. Currently, we focus on hedging our
foreign currency risk related to the British Pound Sterling, Euro, Japanese Yen, Malaysian Ringgit, Philippine Peso,
Singapore Dollar and Thai Baht. See Part II, Item 8, Notes 1 and 11 in the Notes to Consolidated Financial State-
ments, included in this Annual Report on Form 10-K.
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