iRobot 2007 Annual Report Download - page 101

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Allowance for Doubtful Accounts
The Company maintains an allowance for doubtful accounts to provide for the estimated amount of accounts
receivable that may not be collected. The allowance is based upon an assessment of customer creditworthiness,
historical payment experience and the age of outstanding receivables.
Activity related to the allowance for doubtful accounts was as follows:
December 29,
2007
December 30,
2006
December 31,
2005
Fiscal Year Ended
(In thousands)
Balance at beginning of period.................... $163 $117 $ 50
Provision.................................... — 121 83
Deduction(*) ................................. (98) (75) (16)
Balance at end of period ........................ $ 65 $163 $117
(*) Deductions related to allowance for doubtful accounts represent amounts written off against the allowance, less
recoveries.
Inventory
Inventory is stated at the lower of cost or net realizable value with cost being determined using the first-in, first-
out (FIFO) method. The Company maintains a reserve for inventory items to provide for an estimated amount of
excess or obsolete inventory.
Activity related to the inventory reserve was as follows:
December 29,
2007
December 30,
2006
December 31,
2005
Fiscal Year Ended
(In thousands)
Balance at beginning of period ................... $554 $485 $1,903
Provision ................................... 106 267 251
Deduction(*) ................................ (219) (198) (1,669)
Balance at end of period ........................ $441 $554 $ 485
(*) Deductions related to inventory reserve accounts represent amounts written off against the reserve.
67
iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Form 10-K