ADP 2014 Annual Report Download - page 57

Funds held for clients have been invested in the following categories:
June 30,
2015
2014
Funds held for clients:
Restricted cash and cash equivalents held to satisfy client funds obligations
$ 4,047.0
$ 1,187.8
Restricted short-term marketable securities held to satisfy client funds obligations
4,497.7
1,312.5
Restricted long-term marketable securities held to satisfy client funds obligations
16,320.6
16,757.7
Total funds held for clients
$ 24,865.3
$ 19,258.0
Client funds obligations represent the Company's contractual obligations to remit funds to satisfy clients' payroll and tax payment obligations and are recorded on
the Consolidated Balance Sheets at the time that the Company impounds funds from clients. The client funds obligations represent liabilities that will be repaid
within one year of the balance sheet date. The Company has reported client funds obligations as a current liability on the Consolidated Balance Sheets totaling
$24,650.5 million and $18,963.4 million as of June 30, 2015 and J une 30, 2014 , respectively. The Company has classified funds held for clients as a current asset
since these funds are held solely for the purposes of satisfying the client funds obligations. The Company has reported the cash flows related to the purchases of
corporate and client funds marketable securities and related to the proceeds from the sales and maturities of corporate and client funds marketable securities on a
gross basis in the investing section of the Statements of Consolidated Cash Flows. The Company has reported the cash inflows and outflows related to client funds
investments with original maturities of 90 days or less on a net basis within net increase in restricted cash and cash equivalents and other restricted assets held to
satisfy client funds obligations in the investing section of the Statements of Consolidated Cash Flows. The Company has reported the cash flows related to the
cash received from and paid on behalf of clients on a net basis within net increase in client funds obligations in the financing section of the Statements of
Consolidated Cash Flows.
Approximately 80% of the available-for-sale securities held a AAA or A A rating at J une 30, 2015 , as rated by Moody's, Standard & Poor's and, for Canadian
securities, Dominion Bond Rating Service. A ll available-for-sale securities were rated as investment grade at J une 30, 2015 .
Expected maturities of available-for-sale securities at June 30, 2015 are as follows:
Due in one year or less $ 4,524.3
Due after one year to two years 3,121.7
Due after two years to three years 2,872.7
Due after three years to four years 2,613.5
Due after four years 7,741.6
Total available-for-sale securities $ 20,873.8
NOTE 5. RECEIV ABL ES
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 implementation and transition costs for clients acquiring
ADP’s products and services. 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, and internal assessments of credit quality, 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.
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