ADP 2010 Annual Report Download - page 66

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The Company
’
s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect
the classification of assets and liabilities within the fair value hierarchy. In certain instances, the inputs used to measure fair value
may meet the definition of more than one level of the fair value hierarchy. The significant input with the lowest level priority is used
to determine the applicable level in the fair value hierarchy.
The following table presents the Company
’
s assets measured at fair value on a recurring basis at June 30, 2010. Included in the table
are available
-
for
-
sale securities within corporate investments of $132.2 million and funds held for clients of $15,384.8 million. Refer to
Note 5 for additional disclosure in relation to corporate investments and funds held for clients.
NOTE 7. RECEIVABLES
The Company
’
s receivables include notes receivable for the financing of the sale of computer systems, most of which are due from
automotive, truck and powersports dealers. These notes receivable are reflected on the Consolidated Balance Sheets as follows:
Accounts receivable, net is recorded based upon the gross amount the Company expects to receive from its clients, which is net of
an allowance for doubtful accounts of $49.0 million and $47.8 million at June 30, 2010 and 2009, respectively. Long
-
term receivables,
net represent our notes receivable that are recorded based upon the gross amount the Company expects to receive from its clients,
which is net of an allowance for doubtful accounts of $16.1 million and $18.0 million at June 30, 2010 and 2009, respectively, and
unearned income of $9.5 million and $12.8 million at June 30, 2010 and 2009, respectively, and represents the excess of the gross
receivables over the sales price of the computer systems financed. The unearned income is amortized using the effective interest
method. The carrying value of notes receivable approximates fair value.
51
Level 1
Level 2
Level 3
Total
U.S Treasury and direct obligations of
U.S. government agencies
$
-
$
5,911.4
$
-
$
5,911.4
Corporate bonds
-
5,332.9
-
5,332.9
Asset
-
backed securities
-
968.9
-
968.9
Canadian government obligations and
-
Canadian government agency obligations
-
1,032.5
-
1,032.5
Other securities
8.0
2,263.3
-
2,271.3
Total available
-
for
-
sale securities
$
8.0
$
15,509.0
$
-
$
15,517.0
June 30,
2010
2009
Current
Long
-
term
Current
Long
-
term
Receivables
$
110.3
$
155.0
$
136.8
$
193.4
Less:
Allowance for doubtful accounts
(9.4
)
(16.1
)
(9.9
)
(18.0
)
Unearned income
(9.9
)
(9.5
)
(13.3
)
(12.8
)
$
91.0
$
129.4
$
113.6
$
162.6
Long
-
term receivables at June 30, 2010 mature as follows:
2012
$
70.0
2013
48.7
2014
27.5
2015
8.5
2016
0.3
$
155.0