Warranty and Deferred Extended Warranty Revenue (Notes)

6 Months Ended

Aug. 02, 2013

Product Warranties Disclosures [Abstract]

Warranty and Deferred Extended Warranty Revenue

NOTE 8 — 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 revenue in the Condensed Consolidated Statements of Financial Position. Changes in Dell's liabilities for standard limited warranties and deferred revenue related to extended warranties are presented in the following tables for the periods indicated:

	Three Months Ended						Six Months Ended
	August 2, 2013			August 3, 2012			August 2, 2013			August 3, 2012
	(in millions)
Warranty liability:
Warranty liability at beginning of period	$	760		$	862		$	762		$	888
Costs accrued for new warranty contracts and changes in estimates for pre-existing warranties(a)(b)	256			250			498			533
Service obligations honored	(250		)	(272		)	(494		)	(581		)
Warranty liability at end of period	$	766		$	840		$	766		$	840
Current portion	$	490		$	538		$	490		$	538
Non-current portion	276			302			276			302
Warranty liability at end of period	$	766		$	840		$	766		$	840
	Three Months Ended						Six Months Ended
	August 2, 2013			August 3, 2012(c)			August 2, 2013(c)			August 3, 2012(c)
	(in millions)
Deferred extended warranty revenue:
Deferred extended warranty revenue at beginning of period	$	6,982		$	7,044		$	7,048		$	7,002
Revenue deferred for new extended warranties(b)	1,035			1,027			1,994			2,033
Revenue recognized	(1,013		)	(974		)	(2,038		)	(1,938		)
Deferred extended warranty revenue at end of period	$	7,004		$	7,097		$	7,004		$	7,097
Current portion	$	3,336		$	3,344		$	3,336		$	3,344
Non-current portion	3,668			3,753			3,668			3,753
Deferred extended warranty revenue at end of period	$	7,004		$	7,097		$	7,004		$	7,097

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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.

^(c)  Prior period amounts have been revised to conform to the current period presentation.