Intel Corporations Consolidated Income Statement from its 2008 Annual Report appears below. Note 15, which follows, explains

Question:

Intel Corporation€™s from its 2008 Annual Report appears below.

Intel Corporation€™s Consolidated Income Statement from its 2008

Note 15, which follows, explains the source of the restructuring charges, the breakdown of the charges into employee-related costs and asset impairments, and the balance of the accrued restructuring liability account.
Note 15: Restructuring and Asset Impairment Charges
The following table summarizes restructuring and asset impairment charges by plan for the three years ended December 27, 2008:

We may incur additional restructuring charges in the future for employee severance and benefit arrangements, and facility-related or other exit activities. Subsequent to the end of 2008, management approved plans to restructure some of our manufacturing and assembly and test operations, and align our manufacturing and assembly and test capacity to current market conditions. These actions, which are expected to take place beginning in 2009, include closing two assembly and test facilities in Malaysia, one facility in the Philippines, and one facility in China; stopping production at a 200mm wafer fabrication facility in Oregon; and ending production at our 200mm wafer fabrication facility in California.

2008 NAND Plan
In the fourth quarter of 2008, management approved a plan with Micron to discontinue the supply of NAND flash memory from the 200mm facility within the IMFT manufacturing network. The agreement resulted in a $215 million restructuring charge, primarily related to the IMFT 200mm supply agreement. The restructuring charge resulted in a reduction of our investment in IMFT of $184 million, a cash payment to Micron of $24 million, and other cash payments of $7 million.

2006 Efficiency Program
The following table summarizes charges for the 2006 efficiency program for the three years ended December 27, 2008:

The following table summarizes the restructuring and asset impairment activity for the
2006 efficiency program during 2007 and 2008:

We recorded the additional accruals, net of adjustments, as restructuring and asset impairment charges. The remaining accrual as of December 27, 2008 was related to severance benefits that we recorded within accrued compensation and benefits.
From the third quarter of 2006 through the fourth quarter of 2008, we incurred a total of $1.6 billion in restructuring and asset impairment charges related to this program.
These charges included a total of $678 million related to employee severance and benefit arrangements for approximately 11,900 employees, and $888 million in asset impairment charges.

Required
a. Based on your reading of the note, how would you treat Intel€™s restructuring charges in the assessment of current profitability and the prediction of future earnings?
b. Why is the balance of the €œaccrued restructuring€ limited to employee-related costs?
c. Describe the effect on net income of each entry in the €œaccrued restructuring balance€ account reconciliation.
d. How do U.S. GAAP and IFRS differ on the rules used to compute the restructuringcharge?

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