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These excerpts taken from the WDC 10-K filed Aug 20, 2008. Revenue
and Accounts Receivable
In accordance with standard industry practice, we have
agreements with resellers that provide limited price protection
for inventories held by resellers at the time of published list
price reductions and other incentive programs. In accordance
with current accounting standards, we recognize revenue upon
delivery to OEMs, ODMs and resellers and record a reduction to
revenue for estimated price protection and other programs in
effect until the resellers sell such inventory to their
customers. We base these adjustments on anticipated price
decreases during the reseller holding period, estimated amounts
to be reimbursed to qualifying customers, as well as historical
pricing information. If end-market demand for hard drives
declines significantly, we may have to increase sell-through
incentive payments to resellers, resulting in an increase in our
allowances, which could adversely impact operating results.
We record an allowance for doubtful accounts by analyzing
specific customer accounts and assessing the risk of loss based
on insolvency, disputes or other collection issues. In addition,
we routinely analyze the different receivable aging categories
and establish reserves based on a combination of past due
receivables and expected future losses based primarily on our
historical levels of bad debt losses. If the financial condition
of a significant customer deteriorates resulting in its
inability to pay its accounts when due, or if our overall loss
history changes significantly, an adjustment in our allowance
for doubtful accounts would be required, which could affect
operating results.
We establish provisions against revenue and cost of revenue for
estimated sales returns in the same period that the related
revenue is recognized. We base these provisions on existing
product return notifications. If actual sales returns exceed
expectations, an increase in the sales return accrual would be
required, which could negatively affect operating results.
Revenue and Accounts Receivable In accordance with standard industry practice, we have agreements with resellers that provide limited price protection for inventories held by resellers at the time of published list price reductions and other incentive programs. In accordance with current accounting standards, we recognize revenue upon delivery to OEMs, ODMs and resellers and record a reduction to revenue for estimated price protection and other programs in effect until the resellers sell such inventory to their customers. We base these adjustments on anticipated price decreases during the reseller holding period, estimated amounts to be reimbursed to qualifying customers, as well as historical pricing information. If end-market demand for hard drives declines significantly, we may have to increase sell-through incentive payments to resellers, resulting in an increase in our allowances, which could adversely impact operating results. We record an allowance for doubtful accounts by analyzing specific customer accounts and assessing the risk of loss based on insolvency, disputes or other collection issues. In addition, we routinely analyze the different receivable aging categories and establish reserves based on a combination of past due receivables and expected future losses based primarily on our historical levels of bad debt losses. If the financial condition of a significant customer deteriorates resulting in its inability to pay its accounts when due, or if our overall loss history changes significantly, an adjustment in our allowance for doubtful accounts would be required, which could affect operating results. We establish provisions against revenue and cost of revenue for estimated sales returns in the same period that the related revenue is recognized. We base these provisions on existing product return notifications. If actual sales returns exceed expectations, an increase in the sales return accrual would be required, which could negatively affect operating results. This excerpt taken from the WDC 10-K filed Aug 28, 2007. Revenue
and Accounts Receivable
In accordance with standard industry practice, we have
agreements with resellers that provide limited price protection
for inventories held by resellers at the time of published list
price reductions and other incentive programs. In accordance
with current accounting standards, we recognize revenue upon
delivery to OEMs, ODMs and resellers and record a reduction to
revenue for estimated price protection and other programs in
effect until the resellers sell such inventory to their
customers. We base these adjustments on anticipated price
decreases during the reseller holding period, estimated amounts
to be reimbursed to qualifying customers, as well as historical
pricing information. If end-market demand for hard drives
declines significantly, we may have to increase sell-through
incentive payments to resellers, resulting in an increase in our
allowances, which could adversely impact operating results.
We record an allowance for doubtful accounts by analyzing
specific customer accounts and assessing the risk of loss based
on insolvency, disputes or other collection issues. In addition,
we routinely analyze the different receivable aging categories
and establish reserves based on a combination of past due
receivables and expected future losses based primarily on our
historical levels of bad debt losses. If the financial condition
of a significant customer deteriorates resulting in its
inability to pay its accounts when due, or if our overall loss
history changes significantly, an adjustment in our allowance
for doubtful accounts would be required, which could affect
operating results.
We establish provisions against revenue and cost of revenue for
estimated sales returns in the same period that the related
revenue is recognized. We base these provisions on existing
product return notifications. If actual sales returns exceed
expectations, an increase in the sales return accrual would be
required, which could negatively affect operating results.
This excerpt taken from the WDC 10-K filed Nov 20, 2006. Revenue
and Accounts Receivable
In accordance with standard industry practice, we have
agreements with resellers that provide limited price protection
for inventories held by resellers at the time of published list
price reductions and other incentive programs. In accordance
with current accounting standards, we recognize revenue upon
delivery to OEMs and resellers and record a reduction to revenue
for estimated price protection and other programs in effect
until the resellers sell such inventory to their customers. We
base these adjustments on anticipated price decreases during the
reseller holding period, estimated amounts to be reimbursed to
qualifying customers, as well as historical pricing information.
If end-market demand for hard drives declines significantly, we
may have to increase sell-through incentive payments to
resellers, resulting in an increase in our allowances, which
could adversely impact operating results.
We record an allowance for doubtful accounts by analyzing
specific customer accounts and assessing the risk of loss based
on insolvency, disputes or other collection issues. In addition,
we routinely analyze the different receivable aging categories
and establish reserves based on a combination of past due
receivables and expected future losses based primarily
Table of Contents
on our historical levels of bad debt losses. If the financial
condition of a significant customer deteriorates resulting in
its inability to pay its accounts when due, or if our overall
loss history changes significantly, an adjustment in our
allowance for doubtful accounts would be required, which could
affect operating results.
We establish provisions against revenue and cost of revenue for
estimated sales returns in the same period that the related
revenue is recognized. We base these provisions on existing
product return notifications. If actual sales returns exceed
expectations, an increase in the sales return accrual would be
required, which could negatively affect operating results.
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