SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of Affymetrix, Inc. and its wholly-owned subsidiaries (“Affymetrix” or the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments, consisting of normal recurring entries, considered necessary for a fair presentation have been included.

Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited financial statements should be read in conjunction with the Company's audited financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, from which the balance sheet information as of that date and as included herein was derived.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

There have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Cash Equivalents and Short-term Investments

As of September 30, 2015, the Company held investments that consisted of money market funds and certificates of deposit. All investments with maturities at the date of purchase of 90 days or less that were readily convertible into cash and have insignificant interest rate risk are included in the Company's Condensed Consolidated Balance Sheets as cash equivalents. All investments with maturities at the date of purchase of greater than 90 days and less than one year, namely certificate of deposit, are included in the Company's Condensed Consolidated Balance Sheets as short-term investments.

Comprehensive Income (Loss)

Comprehensive loss is comprised of net income (loss) and other comprehensive loss (“OCI”). OCI includes foreign currency translation adjustments, unrealized gains and losses on the Company's non-marketable securities and unrealized gains and losses on cash flow hedges that are excluded from net income (loss). Total comprehensive loss has been disclosed in the Company's Condensed Consolidated Statements of Comprehensive Income (Loss).

The following table summarizes the amounts reclassified out of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2015 (in thousands):



	December 31, 2014			(Decrease)/ Increase			Reclassification Adjustments			September 30, 2015
Foreign currency translation adjustment	$	(2,933	)	$	(5,936	)	$	—		$	(8,869	)
Unrealized change in non-marketable securities	1,219			(185		)	—			1,034
Unrealized change in cash flow hedges	1,102			1,984			(3,181		)	(95		)
Total accumulated other comprehensive loss, net of tax	$	(612	)	$	(4,137	)	$	(3,181	)	$	(7,930	)

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09) to provide guidance on revenue recognition. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (ASU 2015-14) to defer the effective date for ASU 2014-09 to the first quarter of 2018 for public companies. Early adoption up to the first quarter of 2017 is permitted. Upon adoption, ASU 2014-09 can be applied retrospectively to all periods presented or only to the most current period presented with the cumulative effect of changes reflected in the opening balance of retained earnings in the most current period presented. The Company is currently evaluating the method of adoption and the impact of adopting ASU 2014-09 on its consolidated financial statements.

In May 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest - Imputation of Interest (ASU 2015-03) to provide guidance on the presentation of debt issuance costs. ASU 2015-03 requires a company to present debt issuance costs as a reduction from the carrying amount of the financial liability and not recorded as separate assets. ASU 2015-03 is effective for the Company in the first quarter of 2016. Early adoption is permitted. Upon adoption, ASU 2015-03 should be applied retrospectively to all periods presented. The Company's adoption of ASU 2015-03 would have resulted in a decrease in Other long-term assets, Convertible notes, and Term loan—long-term portion of $2.8 million as of September 30, 2015.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (ASU 2015-11) to provide guidance on simplifying the measurement of inventory. ASU 2015-11 requires a company to measure inventory at the lower of cost and net realizable value. ASU 2015-11 is effective for the Company in the first quarter of 2017. Early adoption is permitted. Upon adoption, ASU 201511 should be applied prospectively. The Company is currently evaluating the method of adoption and the impact of adopting ASU 2015-11 on its consolidated financial statements.