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Accounts Receivable, Net
3 Months Ended
Jan. 26, 2014
Receivables [Abstract]  
Accounts Receivable, Net
Accounts Receivable, Net
Applied has agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. Applied sells its accounts receivable without recourse. Applied, from time to time, also discounts letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements.
Applied factored accounts receivable of $45 million during the three months ended January 26, 2014 and none during the three months ended January 27, 2013. Applied did not discount promissory notes or utilize programs to discount letters of credit issued by customers during the three months ended January 26, 2014 and January 27, 2013. Financing charges on the sale of receivables and discounting of letters of credit are included in interest expense in the accompanying Consolidated Condensed Statements of Operations and were not material for all periods presented.
Accounts receivable are presented net of allowance for doubtful accounts of $74 million at both January 26, 2014 and October 27, 2013. Applied sells principally to manufacturers within the semiconductor, display and solar industries. While Applied believes that its allowance for doubtful accounts is adequate and represents Applied’s best estimate as of January 26, 2014, Applied continues to closely monitor customer liquidity and other economic conditions, which may result in changes to Applied’s estimates regarding collectability.