DELL INC | 2013 | FY | 3


NOTE 9 — 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 on the 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 on the 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:
 
 
Fiscal Year Ended
 
 
February 1,
2013
 
February 3,
2012
 
January 28,
2011
 
 
(in millions)
Warranty liability:
 
 

 
 

 
 

Warranty liability at beginning of period
 
$
888

 
$
895

 
$
912

Costs accrued for new warranty contracts and changes in estimates for pre-existing warranties(a)(b)
 
992

 
1,025

 
1,046

Service obligations honored
 
(1,118
)
 
(1,032
)
 
(1,063
)
Warranty liability at end of period
 
$
762

 
$
888

 
$
895

Current portion
 
$
492

 
$
572

 
$
575

Non-current portion
 
270

 
316

 
320

Warranty liability at end of period
 
$
762

 
$
888

 
$
895

 
 
 
 
 
 
 
 
 
Fiscal Year Ended
 
 
February 1,
2013
 
February 3,
2012
 
January 28,
2011
 
 
(in millions)
Deferred extended warranty revenue:
 
 

 
 

 
 

Deferred extended warranty revenue at beginning of period
 
$
7,002

 
$
6,416

 
$
5,910

Revenue deferred for new extended warranties(b)
 
4,130

 
4,301

 
3,877

Revenue recognized
 
(4,029
)
 
(3,715
)
 
(3,371
)
Deferred extended warranty revenue at end of period
 
$
7,103

 
$
7,002

 
$
6,416

Current portion
 
$
3,400

 
$
3,265

 
$
2,959

Non-current portion
 
3,703

 
3,737

 
3,457

Deferred extended warranty revenue at end of period
 
$
7,103

 
$
7,002

 
$
6,416

____________________
(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.

us-gaap:ProductWarrantyDisclosureTextBlock