Deferred Income on Shipments to Distributors

9 Months Ended

Jan. 01, 2012

Deferred Income on Shipments to Distributors [Abstract]

Deferred Income on Shipments to Distributors

Note 11

Deferred Income on Shipments to Distributors

Included in the caption “Deferred income on shipments to distributors” on the Condensed Consolidated Balance Sheets are amounts related to shipments to certain distributors for which revenue is not recognized until the Company's product has been sold by the distributor to an end customer. The components at January 1, 2012 and April 3, 2011 were as follows:

(in thousands)	January 1, 2012			April 3, 2011
Gross deferred revenue	$	17,853		$	15,463
Gross deferred costs		(3,766	)		(2,610	)
Deferred income on shipments to distributors	$	14,087		$	12,853

The gross deferred revenue represents the gross value of shipments to distributors at the list price billed to the distributor less any price protection credits provided to them in connection with reductions in list price while the products remain in their inventory.  The amount ultimately recognized as revenue will be lower than this amount as a result of future price protection and ship from stock pricing credits which are issued in connection with the sell through of the Company's products to end customers. Historically this amount has represented an average of approximately 28% of the list price billed to the customer. The gross deferred costs represent the standard costs, which approximate actual costs of products, the Company sells to the distributors.  Although the Company monitors the levels and quality of inventory in the distribution channel, its experience is that product returned from these distributors are able to be sold to a different distributor or in a different region of the world.  As such, inventory write-downs for products in the distribution channel have not been significant.