ADP 2011 Annual Report Download - page 52

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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, 2011. Included in the table
are available
-
for
-
sale securities within corporate investments of $134.3 million and funds held for clients of $16,793.2 million. Refer to
Note 5 for additional disclosure in relation to corporate investments and funds held for clients.
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.
NOTE 7. RECEIVABLES
Accounts receivable, net, includes the Company
’
s trade receivables, which are recorded based upon the amount the Company
expects to receive from its clients, net of an allowance for doubtful accounts. The Company
’
s receivables also include notes
receivable for the financing of the sale of computer systems, primarily from auto, truck, motorcycle, marine, recreational vehicle and
heavy equipment dealers. Notes receivable are recorded based upon the amount the Company expects to receive from its clients, net
of an allowance for doubtful accounts and unearned income. The allowance for doubtful accounts is the Company's best estimate of
probable credit losses related to trade receivables and notes receivable based upon the aging of the receivables, historical collection
data, internal assessments of credit quality and the economic conditions in the automobile industry, as well as in the economy as a
whole. The Company charges off uncollectable amounts against the reserve in the period in which it determines they are
uncollectable. Unearned income on notes receivable is amortized using the effective interest method.
52
Level 1
Level 2
Level 3
Total
U.S Treasury and direct obligations of
U.S. government agencies
$
-
$
6,759.1
$
-
$
6,759.1
Corporate bonds
-
6,126.6
-
6,126.6
Asset
-
backed securities
-
447.8
-
447.8
Commercial mortgage
-
backed securities
-
492.5
-
492.5
Municipal bonds
-
516.2
-
516.2
Canadian government obligations and
Canadian government agency obligations
-
1,101.5
-
1,101.5
Other securities
20.1
1,463.7
-
1,483.8
Total available
-
for
-
sale securities
$
20.1
$
16,907.4
$
-
$
16,927.5
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
Commercial mortgage
-
backed securities
-
707.4
-
707.4
Municipal bonds
-
469.5
-
469.5
Canadian government obligations and
Canadian government agency obligations
-
1,032.5
-
1,032.5
Other securities
8.0
1,086.4
-
1,094.4
Total available
-
for
-
sale securities
$
8.0
$
15,509.0
$
-
$
15,517.0