(10) BALANCE SHEET DETAILS

Inventories

Inventories as of December 31, 2011 and March 31, 2011 consisted of (in millions):


	As of December 31, 2011		As of March 31, 2011


Raw materials and work in process	$	2	$	8
Finished goods		67		69
Inventories	$	69	$	77

Property and Equipment, Net

Property and equipment, net, as of December 31, 2011 and March 31, 2011 consisted of (in millions):


	As of December 31, 2011			As of March 31, 2011


Computer equipment and software	$	553		$	504
Buildings		333			355
Leasehold improvements		113			105
Office equipment, furniture and fixtures		69			67
Land		63			66
Construction in progress		35			20
Warehouse equipment and other		10			10
		1,176			1,127
Less: accumulated depreciation		(629	)		(614	)
Property and equipment, net	$	547		$	513

Depreciation expense associated with property and equipment was $23 million and $74 million for the three and nine months ended December 31, 2011, respectively. Depreciation expense associated with property and equipment was $26 million and $79 million for the three and nine months ended December 31, 2010, respectively.

Acquisition-Related Restricted Cash Included in Other Current Assets

Included in other current assets on our Condensed Consolidated Balance Sheets as of December 31, 2011 and March 30, 2011 was $106 million and $100 million, respectively, of acquisition-related restricted cash. In connection with our acquisition of Playfish in fiscal year 2010, we deposited $100 million into an escrow account to pay the former shareholders of Playfish in the event certain performance milestones through December 31, 2011 are achieved. In connection with our acquisition of PopCap in August 2011, we acquired $6 million of additional restricted cash held in an escrow account in the event certain liabilities become due. As these deposits are restricted in nature, they are excluded from cash and cash equivalents. Through the three and nine months ended December 31, 2011, no distributions were made from the restricted cash amount. We expect to pay approximately $50 million in connection with the Playfish earn-out. We expect the remaining $50 million in restricted cash will be released and converted to available cash and cash equivalents in the fourth quarter of fiscal year 2012.

Accrued and Other Current Liabilities

Accrued and other current liabilities as of December 31, 2011 and March 31, 2011 consisted of (in millions):


	As of December 31, 2011		As of March 31, 2011


Other accrued expenses	$	417	$	359
Accrued compensation and benefits		211		232
Accrued royalties		143		96
Deferred net revenue (other)		75		81
Accrued and other current liabilities	$	846	$	768

Deferred net revenue (other) includes the deferral of subscription revenue, deferrals related to our Switzerland distribution business, advertising revenue, licensing arrangements, and other revenue for which revenue recognition criteria has not been met.

Deferred Net Revenue (Packaged Goods and Digital Content)

Deferred net revenue (packaged goods and digital content) was $1,439 million as of December 31, 2011 and $1,005 million as of March 31, 2011. Deferred net revenue (packaged goods and digital content) includes the unrecognized revenue from (1) bundled sales of certain online-enabled packaged goods and digital content for which either we do not have VSOE for the online service that we provide in connection with the sale of the software or we have an obligation to provide future incremental unspecified digital content, (2) certain packaged goods sales of massively-multiplayer online role-playing games, and (3) sales of certain incremental content associated with our core subscription services that can only be played online, which are types of "micro-transactions." We recognize revenue from sales of online-enabled packaged goods and digital content for which (1) we do not have VSOE for the online service that we provided in connection with the sale and (2) we have an obligation to deliver incremental unspecified digital content in the future without an additional fee on a straight-line basis generally over an estimated six-month period beginning in the month after shipment. However, we expense the cost of goods sold related to these transactions during the period in which the product is delivered (rather than on a deferred basis).