Warranty and Deferred Extended Warranty Revenue (Notes)

6 Months Ended

Aug. 03, 2012

Product Warranties Disclosures [Abstract]

Warranty and Deferred Extended Warranty Revenue

NOTE 10 — WARRANTY AND DEFERRED EXTENDED WARRANTY REVENUE

Dell records liabilities for its standard limited warranties at the time of sale for the estimated costs that may be incurred. The liability for standard warranties is included in accrued and other current liabilities and other non-current liabilities in the Condensed Consolidated Statements of Financial Position. Revenue from the sale of extended warranties is recognized over the term of the contract or when the service is completed, and the costs associated with these contracts are recognized as incurred. Deferred extended warranty revenue is included in deferred services revenue in the Condensed Consolidated Statements of Financial Position. Changes in Dell's liabilities for standard limited warranties and deferred services revenue related to extended warranties are presented in the following tables for the periods indicated:

	Three Months Ended						Six Months Ended
	August 3, 2012			July 29, 2011			August 3, 2012			July 29, 2011
	(in millions)
Warranty liability:
Warranty liability at beginning of period	$	862		$	931		$	888		$	895
Costs accrued for new warranty contracts and changes in estimates for pre-existing warranties(a)(b)	250			263			533			556
Service obligations honored	(272		)	(250		)	(581		)	(507		)
Warranty liability at end of period	$	840		$	944		$	840		$	944
Current portion	$	538		$	622		$	538		$	622
Non-current portion	302			322			302			322
Warranty liability at end of period	$	840		$	944		$	840		$	944
	Three Months Ended						Six Months Ended
	August 3, 2012			July 29, 2011			August 3, 2012			July 29, 2011
	(in millions)
Deferred extended warranty revenue:
Deferred extended warranty revenue at beginning of period	$	7,044		$	6,589		$	7,002		$	6,416
Revenue deferred for new extended warranties(b)	1,128			1,120			2,134			2,188
Revenue recognized	(974		)	(915		)	(1,938		)	(1,810		)
Deferred extended warranty revenue at end of period	$	7,198		$	6,794		$	7,198		$	6,794
Current portion	$	3,404		$	3,158		$	3,404		$	3,158
Non-current portion	3,794			3,636			3,794			3,636
Deferred extended warranty revenue at end of period	$	7,198		$	6,794		$	7,198		$	6,794

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^(a)  Changes in cost estimates related to pre-existing warranties are aggregated with accruals for new standard warranty contracts. Dell's warranty liability process does not differentiate between estimates made for pre-existing warranties and new warranty obligations.

^(b)  Includes the impact of foreign currency exchange rate fluctuations.