Summary Of Significant Accounting Policies	9 Months Ended
Jul. 30, 2011
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies	2. Summary of Significant Accounting Policies There have been no material changes in the Company's significant accounting policies for the nine months ended July 30, 2011 as compared to those disclosed in Brocade's Annual Report on Form 10-K for the fiscal year ended October 30, 2010. Recent Accounting Pronouncements In June 2011, the Financial Accounting Standards Board ("FASB") issued an update to ASC 220 Comprehensive Income ("ASC 220"): Presentation of Comprehensive Income. The amendments from this update will result in more converged guidance on how comprehensive income is presented under U.S. GAAP and International Financial Reporting Standards ("IFRS"). With this update to ASC 220, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income, nor does it affect how earnings per share is calculated or presented. Current U.S. GAAP allows reporting entities three alternatives for presenting other comprehensive income and its components in financial statements. One of those alternatives is to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. This update eliminates that option. The update to ASC 220 should be applied retrospectively and will be adopted by the Company in the first quarter of fiscal year 2013. The Company does not expect the adoption of ASC 220 to have a material impact on its financial position, results of operations or cash flows. In May 2011, the FASB issued an update to ASC 820 Fair Value Measurement ("ASC 820"): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. The amendments result in common fair value measurement and disclosure requirements under U.S. GAAP and IFRS. The update also provides for certain changes in current U.S. GAAP disclosure requirements, for example with respect to the measurement of level 3 assets and for measuring the fair value of an instrument classified in a reporting entity's shareholders' equity. The update to ASC 820 should be applied prospectively and it will be adopted by the Company in the second quarter of fiscal year 2012. The Company is currently evaluating the impact of the update but does not expect the adoption of ASC 820 to have a material impact on its financial position, results of operations or cash flows. In December 2010, the FASB issued an update to ASC 350 Intangibles — Goodwill and Other ("ASC 350"): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. The update requires an entity with reporting units that have carrying amounts that are zero or negative to assess whether it is more likely than not that the reporting units' goodwill is impaired. If the entity determines that it is more likely than not that the goodwill of one or more of its reporting units is impaired, the entity should perform Step 2 of the goodwill impairment test for those reporting unit(s). Any resulting goodwill impairment should be recorded as a cumulative-effect adjustment to beginning retained earnings in the period of adoption. Any goodwill impairments occurring after the initial adoption of the amendments should be included in earnings as required by Section 350-20-35. This update to ASC 350 will be adopted by the Company in the first quarter of fiscal year 2012. The Company is currently evaluating the impact of the update, but does not expect the adoption of ASC 350 to have a material impact on its financial position, results of operations or cash flows. In December 2010, the FASB issued an update to ASC 805 Business Combinations ("ASC 805"): Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The update to ASC 805 will be adopted by the Company for any acquisitions occurring after the beginning of the first quarter of fiscal year 2012, with earlier adoption permitted. Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. The Company's cash, cash equivalents and short-term investments are primarily maintained at five major financial institutions in the United States. Deposits held with banks may be redeemed upon demand and may exceed the amount of insurance provided on such deposits. A majority of the Company's accounts receivable balance is derived from sales to OEM partners in the computer storage and server industry. As of July 30, 2011, three customers accounted for 18%, 12% and 12%, respectively, of total accounts receivable. As of October 30, 2010, three customers accounted for 17%, 14% and 10%, respectively, of total accounts receivable. The Company performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable balances. The Company has established reserves for credit losses, sales allowances, and other allowances. For the three months ended July 30, 2011, three customers each represented 10% or more of the Company's total net revenues for a combined total of 43% of total net revenues (of which individual customers representing greater than 10% of total net revenues represented 16%, 15% and 12% of total net revenues, respectively). For the three months ended July 31, 2010, three customers each represented 10% or more of the Company's total net revenues for a combined total of 44% of total net revenues (of which individual customers representing greater than 10% of total net revenues represented 17%, 15% and 12% of total net revenues, respectively). The Company currently relies on single and limited sources for multiple key components used in the manufacture of its products. Additionally, the Company relies on multiple contract manufacturers ("CMs") for the production of its products. Although the Company uses standard parts and components for its products where possible, the Company's CMs currently purchase, on their behalf, several key components used in the manufacture of products from single or limited supplier sources.

Summary Of Significant Accounting Policies

9 Months Ended

Jul. 30, 2011

Summary Of Significant Accounting Policies

Summary Of Significant Accounting Policies

2. Summary of Significant Accounting Policies

There have been no material changes in the Company's significant accounting policies for the nine months ended July 30, 2011 as compared to those disclosed in Brocade's Annual Report on Form 10-K for the fiscal year ended October 30, 2010.

Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board ("FASB") issued an update to ASC 220 Comprehensive Income ("ASC 220"): Presentation of Comprehensive Income. The amendments from this update will result in more converged guidance on how comprehensive income is presented under U.S. GAAP and International Financial Reporting Standards ("IFRS"). With this update to ASC 220, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income, nor does it affect how earnings per share is calculated or presented. Current U.S. GAAP allows reporting entities three alternatives for presenting other comprehensive income and its components in financial statements. One of those alternatives is to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. This update eliminates that option. The update to ASC 220 should be applied retrospectively and will be adopted by the Company in the first quarter of fiscal year 2013. The Company does not expect the adoption of ASC 220 to have a material impact on its financial position, results of operations or cash flows.

In May 2011, the FASB issued an update to ASC 820 Fair Value Measurement ("ASC 820"): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. The amendments result in common fair value measurement and disclosure requirements under U.S. GAAP and IFRS. The update also provides for certain changes in current U.S. GAAP disclosure requirements, for example with respect to the measurement of level 3 assets and for measuring the fair value of an instrument classified in a reporting entity's shareholders' equity. The update to ASC 820 should be applied prospectively and it will be adopted by the Company in the second quarter of fiscal year 2012. The Company is currently evaluating the impact of the update but does not expect the adoption of ASC 820 to have a material impact on its financial position, results of operations or cash flows.

In December 2010, the FASB issued an update to ASC 350 Intangibles — Goodwill and Other ("ASC 350"): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. The update requires an entity with reporting units that have carrying amounts that are zero or negative to assess whether it is more likely than not that the reporting units' goodwill is impaired. If the entity determines that it is more likely than not that the goodwill of one or more of its reporting units is impaired, the entity should perform Step 2 of the goodwill impairment test for those reporting unit(s). Any resulting goodwill impairment should be recorded as a cumulative-effect adjustment to beginning retained earnings in the period of adoption. Any goodwill impairments occurring after the initial adoption of the amendments should be included in earnings as required by Section 350-20-35. This update to ASC 350 will be adopted by the Company in the first quarter of fiscal year 2012. The Company is currently evaluating the impact of the update, but does not expect the adoption of ASC 350 to have a material impact on its financial position, results of operations or cash flows.

In December 2010, the FASB issued an update to ASC 805 Business Combinations ("ASC 805"): Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The update to ASC 805 will be adopted by the Company for any acquisitions occurring after the beginning of the first quarter of fiscal year 2012, with earlier adoption permitted.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. The Company's cash, cash equivalents and short-term investments are primarily maintained at five major financial institutions in the United States. Deposits held with banks may be redeemed upon demand and may exceed the amount of insurance provided on such deposits.

A majority of the Company's accounts receivable balance is derived from sales to OEM partners in the computer storage and server industry. As of July 30, 2011, three customers accounted for 18%, 12% and 12%, respectively, of total accounts receivable. As of October 30, 2010, three customers accounted for 17%, 14% and 10%, respectively, of total accounts receivable. The Company performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable balances. The Company has established reserves for credit losses, sales allowances, and other allowances.

For the three months ended July 30, 2011, three customers each represented 10% or more of the Company's total net revenues for a combined total of 43% of total net revenues (of which individual customers representing greater than 10% of total net revenues represented 16%, 15% and 12% of total net revenues, respectively). For the three months ended July 31, 2010, three customers each represented 10% or more of the Company's total net revenues for a combined total of 44% of total net revenues (of which individual customers representing greater than 10% of total net revenues represented 17%, 15% and 12% of total net revenues, respectively).

The Company currently relies on single and limited sources for multiple key components used in the manufacture of its products. Additionally, the Company relies on multiple contract manufacturers ("CMs") for the production of its products. Although the Company uses standard parts and components for its products where possible, the Company's CMs currently purchase, on their behalf, several key components used in the manufacture of products from single or limited supplier sources.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details