DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS

9 Months Ended

Dec. 26, 2020

Balance Sheet Related Disclosures [Abstract]

DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS

Accounts receivable, net:


(in thousands)	December 26, 2020		March 28, 2020
Accounts receivable	$	402,285	$	350,642

Provisions for promotions, rebates, and other	(81,802)		(101,666)
Provisions for doubtful accounts and sales allowances	(5,006)		(2,141)
Accounts receivable, net	$	315,477	$	246,835

The Company maintains a provision for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company regularly performs credit evaluations of its customers’ financial conditions and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks, and economic conditions that may affect a customer’s ability to pay, including any reasonable and supportable forecasts of the future.

For the period ended December 26, 2020, our assessment considered business and market disruptions caused by COVID-19 and estimates of credit and collectability trends. The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict, causing variability and volatility that may impact our allowance for credit losses in future periods.

As a result of the Acquisition, the Company assumed a financing agreement with an unrelated third-party financing company (the "Financing Agreement") whereby the Company offers distributors and resellers direct or indirect financing on their purchases of Polycom's products and services. In return, the Company agrees to pay the financing company a fee based on a pre-defined percentage of the transaction amount financed. In certain instances, these financing arrangements result in a transfer of the Company's receivables, without recourse, to the financing company. If the transaction meets the applicable criteria under Topic 860 and is accounted for as a sale of financial assets, the related accounts receivable is excluded from the balance sheet upon receipt of the third-party financing company's payment remittance. In certain legal jurisdictions, the arrangements that involve maintenance services or products bundled with maintenance at one price do not qualify as a sale of financial assets in accordance with the authoritative guidance. Accordingly, accounts receivable related to these arrangements are accounted for as a secured borrowing in accordance with Topic 860, and the Company records a liability for any cash received, while maintaining the associated accounts receivable balance until the distributor or reseller remits payment to the third-party financing company.

During the quarter ended December 26, 2020, total transactions entered pursuant to the terms of the Financing Agreement were approximately $21.8 million all of which related to the transfer of the financial assets outside of the United States. During the quarter ended December 28, 2019, total transactions entered pursuant to the terms of the Financing Agreement were approximately $36.0 million, of which $26.2 million was related to the transfer of the financial assets outside of the United States. The financing of these receivables accelerated the collection of cash and reduced the Company's credit exposure. Included in "Accounts receivables, net" in the Company's condensed consolidated balance sheets as of December 26, 2020 and March 28, 2020 was approximately $11.8 million and $22.5 million, respectively due from the financing company, of which $11.8 million and $16.5 million, respectively was related to accounts receivable transferred outside of the United States. Total fees incurred pursuant to the Financing Agreement were immaterial for the quarters ended December 26, 2020 and December 28, 2019. These fees are recorded as a reduction to revenue on the Company's condensed consolidated statements of operations.

Inventory, net:


(in thousands)	December 26, 2020		March 28, 2020
Raw materials	$	95,195	$	97,371
Work in process	9,392		459
Finished goods	85,881		66,697
Inventory, net	$	190,468	$	164,527

Accrued Liabilities:


(in thousands)	December 26, 2020		March 28, 2020
Short term deferred revenue	$	146,887	$	144,040
Employee compensation and benefits	88,142		48,153









Accrued other	166,254		181,473
Accrued liabilities	$	401,283	$	373,666

The Company's warranty obligation is included as a component of accrued liabilities on the condensed consolidated balance sheets. Changes in the warranty obligation during the nine months ended December 26, 2020 and December 28, 2019 were as follows:


	Nine Months Ended
(in thousands)	December 26, 2020		December 28, 2019
Warranty obligation at beginning of period	$	15,261	$	17,984

Warranty provision related to products shipped	17,092		14,235
Deductions for warranty claims processed	(12,736)		(16,015)
Adjustments related to preexisting warranties	(4,097)		(590)
Warranty obligation at end of period(1)	$	15,520	$	15,614