Twenty-First Century Fox 2013 Annual Report Download - page 94

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Concentration of credit risk
Cash and cash equivalents are maintained with several financial institutions. The Company has deposits held
with banks that exceed the amount of insurance provided on such deposits. Generally, these deposits may be
redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear
minimal credit risk.
Receivables, net
Receivables, net are presented net of an allowance for returns and doubtful accounts, which is an estimate of
amounts that may not be collectible. In determining the allowance for returns, management analyzes historical
returns, current economic trends and changes in customer demand and acceptance of the Company’s products.
Based on this information, management reserves a percentage of each dollar of product sales that provide the
customer with the right of return. The allowance for doubtful accounts is estimated based on historical
experience, receivable aging, current economic trends and specific identification of certain receivables that are at
risk of not being paid.
The Company has receivables with original maturities greater than one year in duration principally related
to the Company’s sale of program rights in the television syndication markets within the Filmed Entertainment
segment. Allowances for credit losses are established against these non-current receivables as necessary. As of
June 30, 2013 and 2012 these allowances were not material.
Receivables, net consist of:
As of June 30,
2013 2012
(in millions)
Totalreceivables................................................... $6,795 $6,415
Allowances for returns and doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . (899) (800)
Total receivables, net from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . 5,896 5,615
Total receivables, net from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . — 1,380
Totalreceivables,net ............................................... 5,896 6,995
Less: current receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,459) (6,608)
Non-currentreceivables,net.......................................... $ 437 $ 387
Inventories
Filmed Entertainment Costs:
In accordance with ASC 926, “Entertainment –Films” (“ASC 926”), Filmed Entertainment costs include
capitalized production costs, overhead and capitalized interest costs, net of any amounts received from outside
investors. These costs, as well as participations and talent residuals, are recognized as operating expenses on an
individual film or network series based on the ratio that fiscal 2013’s gross revenues bear to management’s
estimate of total remaining ultimate gross revenues. Television production costs incurred in excess of the amount
of revenue contracted for each episode in the initial market are expensed as incurred on an episode-by-episode
basis. Estimates for initial syndication and basic cable revenues are not included in the estimated lifetime
revenues of network series until such sales are probable. Television production costs incurred subsequent to the
establishment of secondary markets are capitalized and amortized. Marketing costs and development costs under
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