Company: CRUS
Filing Date: 2025-05-23
Form Type: 10-K
Source: 0000772406-25-000014
Chunk: 64

Company: CIRRUS LOGIC, INC.
Filing Date: 2025-05-23
Form: 10-K
Item: Item 7
Chunk 64
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ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Please read the following discussion in conjunction with our audited historical consolidated financial statements and notes thereto, which are included elsewhere in this Form 10-K. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. Actual results could differ materially because of the factors discussed in Part I, Item 1A. “Risk Factors” of this Form 10-K and elsewhere in this report, as well as in the documents we file with the SEC, including our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Critical Accounting Estimates

Our discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements included in this report, which have been prepared in accordance with U.S. generally accepted accounting principles.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts.  We evaluate the estimates on an on-going basis.  We base these estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.  Our accounting policies are more fully described in Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements contained in Item 8.

The Company considers the following accounting policies to involve the highest degree of judgment in the preparation of the consolidated financial statements:

Inventory Valuation 

Inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis.  Cost is computed using standard costs, which approximate actual cost.  The Company writes down inventories to net realizable value based on forecasted customer unit demand while taking into account product release schedules and product life cycles.  The Company also reviews and writes down inventory, as appropriate, based on the age and condition of the inventory.  Actual demand and market conditions may be different from those projected by management, which could have a material effect on our operating results and financial position.  

Uncertain Tax Positions

The calculation of our tax liabilities involves assessing uncertainties with respect to the application of complex tax rules.  Uncertain tax positions must meet a more likely than not threshold to be