What is the main financial event being reported by AMD?

AMD is reporting a one-time, non-cash gain of approximately $325 million related to the accounting treatment of its investment in GlobalFoundries Inc. (GF) following its deconsolidation.

Why is AMD recognizing this gain?

The gain arises because AMD is required to record its opening investment in GF at fair value as of the date of deconsolidation (December 27, 2009). The difference between this fair value and the net carrying book value results in the recognized gain.

Will this gain impact AMD's cash flow?

No, the filing explicitly states this is a 'non-cash' gain. It represents an accounting adjustment rather than an actual cash inflow.

When will this gain be reflected in AMD's financial results?

The gain will be recognized in the fiscal quarter ended March 27, 2010, and will appear in the 'Other income (expense), net' section of the Consolidated Statement of Operations.

AMD 8-K SEC Disclosure

Summary

This 8-K filing by Advanced Micro Devices, Inc. (AMD) on April 8, 2010, primarily concerns the financial accounting treatment of its investment in GlobalFoundries Inc. (GF). As previously disclosed, AMD deconsolidated GF effective December 27, 2009, and began accounting for its investment under the equity method. This report details the completion of a valuation analysis for this investment, which necessitates recording the opening investment at fair value as of the deconsolidation date.

Key Highlights

1AMD will recognize a one-time, non-cash gain of approximately $325 million in the fiscal quarter ended March 27, 2010.
2This gain is related to the deconsolidation of GlobalFoundries Inc. (GF) and the subsequent fair value adjustment of the investment.
3The gain will be recorded in the 'Other income (expense), net' line item on the Consolidated Statement of Operations.
4The fair value determination was completed on April 7, 2010.
5This event stems from the deconsolidation of GF in late 2009, where AMD transitioned to the equity method of accounting for its GF investment.

ADVANCED MICRO DEVICES INC 8-K Report, Corporate Update (Apr 8, 2010)

Summary

Key Highlights

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