A summary of property and equipment is as follows:

In March 1998, the American Institute of Certified Public Accountants (AICPA) issued Statement of Position (SOP) 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” This standard requires that certain costs related to the development or purchase of internal-use software be capitalized and amortized over the estimated useful life of the software. This SOP also requires that costs related to the preliminary project stage, data conversion and the post-implementation/operation stage of an internal-use computer software development project be expensed as incurred. SOP 98-1 is effective for financial statements issued for fiscal years beginning after December 31, 1998, which, in the case of the Company is April 1, 1999. SOP 98-1 is not expected to have a material impact on the Company’s consolidated financial statements.

Software Development Costs Costs of internally developed software for resale are expensed until the technological feasibility of the software product has been established. Thereafter, software development costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. The cost of capitalized software is amortized over the products’ estimated useful lives, which is typically five years. Each quarter, the Company analyzes the realizability of its recorded software assets. This process occasionally results in accelerated amortization charges which, over the past few years, has resulted in an effective amortization period of approximately four years. Amortization of the capitalized software assets begins upon the declaration of the underlying products as generally available for sale. During the years ended March 31, 1997, 1998 and 1999, $25.8 million, $45.6 million and $68.8 million, respectively, of software development costs were capitalized. Amortization for the years ended March 31, 1997, 1998 and 1999 was $11.9 million, $23.7 million and $32.8 million, respectively. These expenses were reported within cost of maintenance services and product licenses in the accompanying consolidated statements of earnings and comprehensive income.

Purchased Software and Related Assets Purchased software and related assets are recorded at cost. Amortization is calculated on the straight-line method over the estimated useful lives of the products, which, after impairment adjustments (discussed below), range from three to five years. The portion of a purchase which pertains to in-process research and development is expensed in the period of the acquisition. Amortization of the capitalized software assets begins upon the declaration of the underlying products as generally available for sale. Amortization for the years ended March 31, 1997, 1998 and 1999 was $7.5 million, $10.2 million and $11.2 million, respectively. These expenses were reported as cost of maintenance services and product licenses in the accompanying consolidated statements of earnings and comprehensive income.

The Company assesses asset impairment based on the guidance set forth in Statement of Financial Accounting Standards (SFAS) No. 121, “Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of.” The Company reviews its long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected future cash flows from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset.

(f) Foreign Currency Translation and Risk Management The Company operates globally and the functional currency for most of its non-U.S. enterprises is the local currency. Financial statements of these foreign operations are translated into U.S. dollars using the current rate method in accordance with SFAS No. 52, “Foreign Currency Translation.” As a result, the Company’s U.S. dollar net cash flows from international operations may be adversely affected by changes in foreign currency exchange rates. To minimize the Company’s risk from changes in foreign currency exchange rates, the Company utilizes certain derivative financial instruments.