iRobot 2008 Annual Report Download - page 112

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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 27,
2008 December 29,
2007 December 30,
2006
Fiscal Year Ended
(In thousands)
Balance at beginning of period ................... $ 65 $163 $117
Provision ................................... 1,005 — 121
Deduction(*) ................................ (1,005) (98) (75)
Balance at end of period ........................ $ 65 $ 65 $163
(*) Deductions related to allowance for doubtful accounts represent amounts written off against the allowance, less
recoveries.
Inventory
Inventory is stated at the lower ofcost 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 27,
2008 December 29,
2007 December 30,
2006
Fiscal Year Ended
(In thousands)
Balance at beginning of period.................... $ 441 $554 $485
Provision.................................... 2,622 106 267
Deduction(*) ................................. (293) (219) (198)
Balance at end of period ........................ $2,770 $ 441 $ 554
(*) Deductions related to inventory reserve accounts represent amounts written off against the reserve.
64
iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)