SUMMARY OF ACCOUNTING POLICIES (Policies)

12 Months Ended

Mar. 31, 2013

SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

• Basis of Presentation and Principles of Consolidation

        The Company's third fiscal quarter ends on December 31, and the fourth fiscal quarter and year ends on March 31 of each year. The first fiscal quarter ended on June 29, 2012, July 1, 2011 and July 2, 2010, respectively, and the second fiscal quarter ended on September 28, 2012, September 30, 2011 and October 1, 2010, respectively. Amounts included in the consolidated financial statements are expressed in U.S. dollars unless otherwise designated.

        The accompanying consolidated financial statements include the accounts of Flextronics and its majority-owned subsidiaries, after elimination of intercompany accounts and transactions. The Company consolidates all majority-owned subsidiaries and investments in entities in which the Company has a controlling interest. For consolidated majority-owned subsidiaries in which the Company owns less than 100%, the Company recognizes a noncontrolling interest for the ownership of the noncontrolling owners. As of March 31, 2013 and 2012, the noncontrolling interest was not material. The associated noncontrolling owners' interest in the income or losses of these companies has not been material to the Company's results of operations for any of the periods presented, and has been classified within interest and other expense, net, in the consolidated statements of operations.

        In fiscal year 2013, the Company finalized the sale of certain assets of a non-core business, including intellectual property. In addition, the Company completed the sale of another non-core business during fiscal year 2013. In accordance with the accounting guidance, these non-core businesses represent separate asset groups and the divestitures qualify as discontinued operations, and accordingly, the Company has reported the results of operations and financial position of these businesses in discontinued operations within the consolidated statements of operation and consolidated balance sheets for all periods presented as applicable.

Use of Estimates

• Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things: allowances for doubtful accounts; inventory write-downs; valuation allowances for deferred tax assets; uncertain tax positions; valuation and useful lives of long-lived assets including property, equipment, intangible assets and goodwill; asset impairments; fair values of financial instruments including investments, notes receivable and derivative instruments; restructuring charges; contingencies; fair values of assets and liabilities obtained in business combinations and the fair values of stock options and share bonus awards granted under the Company's stock-based compensation plans. Actual results may differ from previously estimated amounts, and such differences may be material to the consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur.

Translation of Foreign Currencies

• Translation of Foreign Currencies

        The financial position and results of operations for certain of the Company's subsidiaries are measured using a currency other than the U.S. dollar as their functional currency. Accordingly, all assets and liabilities for these subsidiaries are translated into U.S. dollars at the current exchange rates as of the respective balance sheet dates. Revenue and expense items are translated at the average exchange rates prevailing during the period. Cumulative gains and losses from the translation of these subsidiaries' financial statements are reported as a separate component of shareholders' equity. Foreign exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved, and re-measurement adjustments for foreign operations where the U.S. dollar is the functional currency, are included in operating results. Non-functional currency transaction gains and losses, and re-measurement adjustments were not material to the Company's consolidated results of operations for any of the periods presented, and have been classified as a component of interest and other expense, net in the consolidated statements of operations.

Revenue Recognition

• Revenue Recognition

        The Company recognizes manufacturing revenue when it ships goods or the goods are received by its customer, title and risk of ownership have passed, the price to the buyer is fixed or determinable and recoverability is reasonably assured. Generally, there are no formal substantive customer acceptance requirements or further obligations related to manufacturing services. If such requirements or obligations exist, then the Company recognizes the related revenues at the time when such requirements are completed and the obligations are fulfilled. The Company makes provisions for estimated sales returns and other adjustments at the time revenue is recognized based upon contractual terms and an analysis of historical returns. These provisions were not material to the consolidated financial statements for any of the periods presented.

        The Company provides services for its customers that range from contract design to manufacturing and logistics to repair services. For contract design services the customer purchases engineering and development services on a time and materials basis. For original product design services the Company develops products to be offered for sale by OEM customers under the OEM's brand name. The Company recognizes service revenue when the services have been performed, and the related costs are expensed as incurred. Net sales for services were less than 10% of the Company's total sales for all periods presented, and accordingly, are included in net sales in the consolidated statements of operations. The Company recognized research and development costs related to its ODM personal computing business of $78.9 million and $46.5 million for the fiscal years ended March 31, 2012 and 2011, respectively. Research and development activities related to ODM personal computing had ceased by the end of fiscal year 2012.

Customer Credit Risk And Concentration Of Credit Risk

• Customer Credit Risk

        The Company has an established customer credit policy, through which it manages customer credit exposures through credit evaluations, credit limit setting, monitoring, and enforcement of credit limits for new and existing customers. The Company performs ongoing credit evaluations of its customers' financial condition and makes provisions for doubtful accounts based on the outcome of those credit evaluations. The Company evaluates the collectability of its accounts receivable based on specific customer circumstances, current economic trends, historical experience with collections and the age of past due receivables. To the extent the Company identifies exposures as a result of credit or customer evaluations, the Company also reviews other customer related exposures, including but not limited to inventory and related contractual obligations.

• Concentration of Credit Risk

        Financial instruments which potentially subject the Company to concentrations of credit risk are primarily accounts receivable, cash and cash equivalents, and derivative instruments.

        The following table summarizes the activity in the Company's allowance for doubtful accounts during fiscal years 2013, 2012 and 2011:

	Balance at Beginning of Year		Charged to Costs and Expenses		Deductions/ Write-Offs			Balance at End of Year
	(In thousands)
Allowance for doubtful accounts:
Year ended March 31, 2011(4)	$	13,163	$	3,877	$	(3,818	)	$	13,222
Year ended March 31, 2012(1)(2)(4)	$	13,222	$	30,122	$	(4,439	)	$	38,905
Year ended March 31, 2013(2)(3)	$	38,905	$	6,643	$	(34,671	)	$	10,877

(1)

Deductions/write-offs amount for fiscal year 2012 includes $3.9 million, which was previously reserved and the underlying accounts receivable balance was reclassified to non-current assets in fiscal year 2012, and carried net of its specific reserve.

(2)

Included in amounts charged to costs and expenses in fiscal year 2012 is $28.0 million related to a distressed customer, which was written off in fiscal year 2013.

(3)

Deductions/write-offs amount for fiscal year 2013 also includes $5.8 million, which was previously reserved and the underlying accounts receivable balance was reclassified to non-current assets in fiscal year 2013 and is carried net of its specific reserve.

(4)

Included in amounts charged to costs and expense in fiscal year 2012 and fiscal year 2011 is $0.2 million, respectively, related to discontinued operations.

        No customer accounted for greater than 10% of the Company's net sales in fiscal 2013. Two customers accounted for approximately 11% and 10%, respectively of the Company's net sales in fiscal 2012. One of these customers accounted for approximately 11% of the Company's net sales in fiscal years 2011. The Company's ten largest customers accounted for approximately 47%, 55% and 52% of its net sales, in fiscal years 2013, 2012 and 2011, respectively. As of March 31, 2013 and 2012, no single customer accounted for greater than 10% of the Company's total accounts receivable.

        The Company maintains cash and cash equivalents with various financial institutions that management believes to be of high credit quality. These financial institutions are located in many different locations throughout the world. The Company's cash equivalents are primarily comprised of cash deposited in checking and money market accounts. The Company's investment policy limits the amount of credit exposure to 20% of the issuer's or the fund's total assets measured at the time of purchase or $10.0 million, whichever is greater.

        The amount subject to credit risk related to derivative instruments is generally limited to the amount, if any, by which a counterparty's obligations exceed the obligations of the Company with that counterparty. To manage counterparty risk, the Company limits its derivative transactions to those with recognized financial institutions. See additional discussion of derivatives at note 7 to the consolidated financial statements.

Cash and Cash Equivalents

• Cash and Cash Equivalents

        All highly liquid investments with maturities of three months or less from original dates of purchase are carried at cost, which approximates fair market value, and are considered to be cash equivalents. Cash and cash equivalents consist of cash deposited in checking accounts, money market funds and time deposits.

        Cash and cash equivalents consisted of the following:

	As of March 31,
	2013		2012
	(In thousands)
Cash and bank balances	$	1,089,697	$	1,174,423
Money market funds and time deposits		497,390		343,906
	$	1,587,087	$	1,518,329

Inventories

• Inventories

        Inventories are stated at the lower of cost (on a first-in, first-out basis) or market value. The stated cost is comprised of direct materials, labor and overhead. The components of inventories, net of applicable lower of cost or market write-downs, were as follows:

	As of March 31,
	2013		2012
	(In thousands)
Raw materials	$	1,683,098	$	1,952,358
Work-in-progress		421,706		537,753
Finished goods		617,696		810,680
	$	2,722,500	$	3,300,791

Property and Equipment, Net

• Property and Equipment, Net

        Property and equipment are stated at cost. Depreciation and amortization is recognized on a straight-line basis over the estimated useful lives of the related assets, with the exception of building leasehold improvements, which are amortized over the term of the lease, if shorter. Repairs and maintenance costs are expensed as incurred. Property and equipment was comprised of the following:

		As of March 31,
	Depreciable Life (In Years)
		2013			2012
		(In thousands)
Machinery and equipment	3 - 10	$	2,668,996		$	2,677,387
Buildings	30		1,032,595			1,024,247
Leasehold improvements	up to 30		384,519			283,340
Furniture, fixtures, computer equipment and software	3 - 7		399,368			373,174
Land	—		127,241			126,314
Construction-in-progress	—		139,032			87,461
			4,751,751			4,571,923
Accumulated depreciation and amortization			(2,577,163	)		(2,495,481	)
Property and equipment, net		$	2,174,588		$	2,076,442

        Total depreciation expense associated with property and equipment amounted to approximately $412.3 million, $407.5 million and $384.3 million in fiscal years 2013, 2012 and 2011, respectively. Property and equipment excludes assets no longer in use and held for sale as a result of restructuring activities, as discussed in note 9 and discontinued operations as discussed in note 18 to the consolidated financial statements.

        The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of property and equipment is measured by comparing its carrying amount to the projected undiscounted cash flows the property and equipment are expected to generate. An impairment loss is recognized when the carrying amount of a long-lived asset exceeds its fair value. Refer to note 12 for a discussion of impairment charges recorded in fiscal year 2013.

Deferred Income Taxes

• Deferred Income Taxes

        The Company provides for income taxes in accordance with the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences between the carrying amount and the tax basis of existing assets and liabilities by applying the applicable statutory tax rate to such differences.

Accounting for Business and Asset Acquisitions

• Accounting for Business and Asset Acquisitions

        The Company has actively pursued business and asset acquisitions, which are accounted for using the acquisition method of accounting. The fair value of the net assets acquired and the results of the acquired businesses are included in the Company's consolidated financial statements from the acquisition dates forward. The Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period. Estimates are used in accounting for, among other things, the fair value of acquired net operating assets, property and equipment, intangible assets and related deferred tax liabilities, useful lives of plant and equipment and amortizable lives for acquired intangible assets. Any excess of the purchase consideration over the identified fair value of the assets and liabilities acquired is recognized as goodwill.

        The Company estimates the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on information available at that time. Contingent consideration is recorded at fair value as of the date of the acquisition with subsequent adjustments recorded in earnings. Changes to valuation allowances on acquired deferred tax assets are recognized in the provision for, or benefit from, income taxes. The valuation of these tangible and identifiable intangible assets and liabilities is subject to further management review and may change materially between the preliminary allocation and end of the purchase price allocation period. Any changes in these estimates may have a material effect on the Company's consolidated operating results or financial position.

Goodwill and Other Intangible Assets

• Goodwill and Other Intangible Assets

        Goodwill is tested for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. Recoverability of goodwill is measured at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit, which is measured based upon, among other factors, market multiples for comparable companies as well as a discounted cash flow analysis. The Company has one reporting unit: Electronics Manufacturing Services ("EMS"). If the recorded value of the assets, including goodwill, and liabilities ("net book value") of the reporting unit exceeds its fair value, an impairment loss may be required to be recognized. Further, to the extent the net book value of the Company as a whole is greater than its fair value in the aggregate, all, or a significant portion of its goodwill may be considered impaired. The Company performed its goodwill impairment assessment on January 31, 2013 and did not elect to perform the qualitative "Step Zero" assessment. Instead the Company performed a quantitative assessment of its goodwill at the afore-mentioned date. Based on this assessment the Company determined that no impairment existed as of the date of the impairment test. The fair value of the reporting unit exceeded the carrying value.

        The following table summarizes the activity in the Company's goodwill account during fiscal years 2013 and 2012:

	As of March 31,
	2013			2012
	(In thousands)
Balance, beginning of the year, net of accumulated impairment of $5,949,977	$	101,670		$	93,207
Additions(1)		160,609			8,607
Purchase accounting adjustments and reclassification to other intangibles(2)		—			601
Foreign currency translation adjustments		(274	)		(745	)
Balance, end of period, net of accumulated impairment of $5,949,977	$	262,005		$	101,670

(1)

For fiscal year 2013, additions to goodwill were primarily related to $98.7 million added from the acquisition of Saturn Electronics and Engineering, Inc ("Saturn"). The remainder of the additions were attributable to certain acquisitions that were not individually, nor in the aggregate, significant to the Company. For fiscal year 2012, additions were attributable to certain acquisitions that were not individually, nor in the aggregate, significant to the Company. Refer to the discussion of the Company's acquisitions in note 15.

(2)

Includes adjustments and reclassifications based on management's estimates resulting from their review and finalization of the valuation of assets and liabilities acquired through certain business combinations completed in a period subsequent to the respective acquisition. These adjustments, reclassifications and acquisitions were not individually, nor in the aggregate, significant to the Company.

        The Company's acquired intangible assets are subject to amortization over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. An impairment loss is recognized when the carrying amount of an intangible asset exceeds its fair value. The Company reviewed the carrying value of its intangible assets as of the year ended March 31, 2013 and concluded that such amounts continued to be recoverable.

        Intangible assets are comprised of customer-related intangible assets, which primarily include contractual agreements and customer relationships; and licenses and other intangible assets, which is primarily comprised of licenses and also includes patents and trademarks, and developed technologies. Other intangible assets as of March 31, 2013 were primarily comprised of $10.3 million of developed technology related to the acquisition of Saturn Electronics and Engineering, Inc ("Saturn"). Generally customer-related intangible assets are amortized on an accelerated method based on expected cash flows, primarily over a period of up to eight years. Licenses and other intangible assets are generally amortized on a straight line basis over a period of up to seven years. No residual value is estimated for any intangible assets. During fiscal year 2013, the gross carrying amount of customer-related intangibles increased by $50.7 million in connection with business acquisitions as described in detail at note 15 to the consolidated financial statements. The fair value of the Company's intangible assets purchased through business combinations is principally determined based on management's estimates of cash flow and recoverability. The components of acquired intangible assets are as follows:

	As of March 31, 2013							As of March 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)
Intangible assets:
Customer-related intangibles	$	294,310	$	(224,517	)	$	69,793	$	243,681	$	(199,238	)	$	44,443
Licenses and other intangibles		21,040		(9,286	)		11,754		22,740		(8,929	)		13,811
Total	$	315,350	$	(233,803	)	$	81,547	$	266,421	$	(208,167	)	$	58,254

        The gross carrying amounts of intangible assets are removed when the recorded amounts have been fully amortized. During the year ended March 31, 2013, the Company sold certain patents with a net carrying amount of $8.6 million. The Company also recognized a charge for impairment of customer-related intangible assets with a net carrying amount of $10.0 million, which is included in the results from discontinued operations, in connection with the sale of a non-core business based on the carrying value of net assets and the sale proceeds. Total intangible asset amortization expense recognized in continuing operations during fiscal years 2013, 2012 and 2011 was $29.5 million, $49.6 million and $66.2 million, respectively. As of March 31, 2013, the weighted-average remaining useful lives of the Company's intangible assets were approximately 2.3 years and 3.3 years for customer-related intangibles, and licenses and other intangible assets, respectively. The estimated future annual amortization expense for acquired intangible assets is as follows:

Fiscal Year Ending March 31,	Amount
	(In thousands)
2014	$	26,383
2015		21,436
2016		16,778
2017		10,069
2018		5,179
Thereafter		1,702
Total amortization expense	$	81,547

Derivative Instruments and Hedging Activities

• Derivative Instruments and Hedging Activities

        All derivative instruments are recognized on the consolidated balance sheets at fair value. If the derivative instrument is designated as a cash flow hedge, effectiveness is tested monthly using a regression analysis of the change in the spot currency rates and the change in the present value of the spot currency rates. The spot currency rates are discounted to present value using functional currency LIBOR rates over the maximum length of the hedge period. The effective portion of changes in the fair value of the derivative instrument (excluding time value) is recognized in shareholders' equity as a separate component of accumulated other comprehensive income (loss), and recognized in the consolidated statements of operations when the hedged item affects earnings. Ineffective and excluded portions of changes in the fair value of cash flow hedges are recognized in earnings immediately. If the derivative instrument is designated as a fair value hedge, the changes in the fair value of the derivative instrument and of the hedged item attributable to the hedged risk are recognized in earnings in the current period. Additional information is included in note 7 to the consolidated financial statements.

Other Current Assets / Other Assets

• Other Current Assets / Other Assets

        Other current assets includes approximately $412.4 million and $514.9 million as of March 31, 2013 and 2012, respectively for the deferred purchase price receivable from our Global and North American Asset-Backed Securitization programs. See note 8 to the consolidated financial statements for additional information regarding the Company's participation in its trade receivables securitization programs. Additionally, the balance as of March 31, 2013 includes $74.4 million relating to the fair value of certain fully vested warrants to purchase common stock of a supplier. These warrants were exercised and the underlying shares were sold subsequent to year end for total proceeds of $67.3 million resulting in a $7.1 million realized loss that will be recognized during the Company's fiscal quarter ending June 28, 2013. Also included in other current assets as of March 31, 2013 is an amount of $251.3 million relating to certain assets purchased on behalf of a customer and financed by a third party banking institution as further described in note 15 to the consolidated financial statements.

        The Company has certain equity investments in, and notes receivable from, non-publicly traded companies and an equity investment in a publicly traded company, which are included within other assets in the Company's consolidated balance sheets. Non-majority-owned investments are accounted for using the equity method when the Company has an ownership percentage equal to or greater than 20% but less than 50%, or has the ability to significantly influence the operating decisions of the issuer; otherwise the cost method is used. The Company monitors these investments for impairment indicators and makes appropriate reductions in carrying values as required. Fair values of these investments, when required, are estimated using unobservable inputs, primarily discounted cash flow projections.

        As of March 31, 2013 and 2012, the Company's equity investments in non-majority owned companies totaled $26.8 million and $38.6 million, respectively. The equity in the earnings or losses of the Company's equity method investments was not material to the consolidated results of operations for any period presented in these consolidated financial statements.

Other Current Liabilities

• Other Current Liabilities

        Other current liabilities includes deferred revenue amounting to $227.0 million and $329.6 million and customer working capital advances amounting to $214.1 million and $326.6 million as of March 31, 2013 and 2012, respectively. Also included in other current liabilities as of March 31, 2013 is an amount of $272.8 million relating to amounts financed by a third party banking institution for the purchase of assets on behalf of a customer as further described in note 15 to the consolidated financial statements.

Restructuring Charges

• Restructuring Charges

        The Company recognizes restructuring charges related to its plans to close or consolidate excess manufacturing and administrative facilities. In connection with these activities, the Company records restructuring charges for employee termination costs, long-lived asset impairment and other exit-related costs.

        The recognition of restructuring charges requires the Company to make certain judgments and estimates regarding the nature, timing and amount of costs associated with the planned exit activity. To the extent the Company's actual results differ from its estimates and assumptions, the Company may be required to revise the estimates of future liabilities, requiring the recognition of additional restructuring charges or the reduction of liabilities already recognized. Such changes to previously estimated amounts may be material to the consolidated financial statements. At the end of each reporting period, the Company evaluates the remaining accrued balances to ensure that no excess accruals are retained and the utilization of the provisions are for their intended purpose in accordance with developed exit plans. See note 12 to the consolidated financial statements for additional information regarding restructuring charges.

Recent Accounting Pronouncements

• Recent Accounting Pronouncements

        In February 2013, the Financial Accounting Standards Board ("FASB") issued guidance which requires an entity to measure obligations resulting from joint and several liability arrangements, including the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors, as well as discussion of the nature of such obligations.

        In February 2013, the FASB issued guidance which requires an entity to disclose amounts reclassified out of accumulated other comprehensive income by component for each period an income statement is presented to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. This disclosure is effective for the Company beginning in fiscal year 2014.

        In December 2011, the FASB issued guidance which requires an entity to disclose information about offsetting and related arrangements to enable financial statement users to evaluate the effect or potential effect of netting arrangements, including rights of setoff associated with the entity's recognized financial assets and liabilities, on the entity's financial position. The new disclosures will enable financial statement users to compare balance sheets prepared under U.S. GAAP and International Financial Reporting Standards (IFRS), which are subject to different offsetting models. The disclosures will be limited to financial instruments (and derivatives) subject to enforceable master netting arrangements or similar agreements. Similar agreements include derivative clearing agreements, global master repurchase agreements, and global master securities lending agreements. Financial instruments and transactions that will be subject to the disclosure requirements may include derivatives, repurchase and reverse repurchase agreements, and securities lending and borrowing arrangements. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The guidance is effective for the Company beginning in fiscal year 2014. The adoption of this guidance will not have a significant impact to the Company's consolidated financial statements.