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Notes to consolidated financial statements (audited)
International Business Machines Corporation and Subsidiary Companies

A. Significant accounting policies B. Accounting changes C. Acquisitions/divestitures D. Financial instruments (excluding derivatives) E. Inventories F. Financing receivables G. Plant, rental machines and other property H. Investments and sundry assets
I. Intangible assets including goodwill J. Borrowings K. Derivatives and hedging transactions L. Other liabilities M. Stockholders’ equity activity N. Contingencies and commitments O. Taxes P. Research, development and engineering
Q. 2005 actions R. Earnings per share of common stock S. Rental expense and lease commitments T. Stock-based compensation U. Retirement-related benefits V. Segment information W. Subsequent events

H. Investments and sundry assets

($ in millions)
At December 31: 2007 2006

* The decrease was primarily due to the year-end remeasurement of pension assets.

** Deferred transition and set-up costs and other deferred arrangements are related to Global Services client arrangements. Also see note A, “Significant Accounting Policies,” for additional information.

+ See note K, “Derivatives and Hedging Transactions,” for the fair value of all derivatives reported in the Consolidated Statement of Financial Position.

Deferred taxes* $ 1,513 $ 3,880
Deferred transition and setup costs and other deferred arrangements** 1,475 1,232
Alliance investments:
Equity method 271 416
Non-equity method 879 628
Long-term deposits 285 228
Derivatives—noncurrent+ 259 213
Marketable securities 531 361
Prepaid software 221 146
Other assets 1,327 1,277
Total $ 6,761 $ 8,381
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IBM 2007 Annual Report

Annual report cover