Effect of New Accounting Pronouncements

6 Months Ended

Apr. 30, 2011

Effect of New Accounting Pronouncements

Effect of New Accounting Pronouncements

Note 16. Effect of New Accounting Pronouncements

Beginning in the first quarter of fiscal 2011, the Company adopted recent accounting guidance for revenue arrangements with multiple deliverables on a prospective basis. This guidance addresses whether to treat individual deliverables or groups of deliverables in a multiple-element arrangement as separate units of accounting and how to allocate the arrangement consideration to the separate units of accounting. The guidance also requires that arrangement consideration be allocated to software deliverables (as a group) and to non-software deliverables (individually) based on relative standalone selling prices and provides guidance for estimating standalone selling prices for purposes of allocating arrangement consideration. The guidance does not affect the accounting for contracts which do not contain non-software deliverables.

The Company infrequently enters into multiple-element arrangements that contain both software and non-software deliverables such as hardware which are impacted by the new guidance. Such contracts are not material either individually or in the aggregate to the unaudited condensed consolidated financial statements. Accordingly, the adoption of the new guidance was not material to the Company's unaudited condensed consolidated financial statements and is not expected to have a material effect on subsequent periods.

In May 2011, the FASB issued new guidance for fair value measurements to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. Among other matters, this new guidance provides clarifications limiting the application of highest and best use concept to only non-financial assets, clarifies the guidance on measuring the fair value of an entity's own equity instruments, as well as new guidance related to portfolio fair value measurement approaches and use of premiums and discounts in a fair value measurement. Additionally, this guidance requires new disclosures to be made for Level 3 fair value measurements, as well as transfers between Level 1 and 2 fair value measurements. The new requirements are effective for the Company in the first quarter of fiscal 2013. The Company will adopt the guidance on a prospective basis effective the first quarter of fiscal 2013. The Company is currently assessing the impact of adoption of the guidance on its consolidated financial statements.

With the exception of the discussion above, the effect of recent accounting pronouncements has not changed from the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2010.