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Note 3 Revenue Recognition | 3 Months Ended
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Dec. 29, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer [Text Block] | Revenue Recognition The Company is a leading global provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. For purposes of determining when to recognize revenue, and in what amount, the Company applies a 5-step model: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. Each of these steps involves the use of significant judgments, as discussed below. Step 1 - Identify the contract with a customer A contract is defined as an agreement between two parties that creates enforceable rights and obligations. The Company generally enters into a master supply agreement (“MSA”) with its customers that provides the framework under which business will be conducted, and pursuant to which a customer will issue purchase orders to specify the quantity, price and delivery requirements for products or services the customer wishes to purchase. The Company generally considers its contract with a customer to be the combination of an MSA and a purchase order or any other similar binding document. Step 2 - Identify the performance obligations in the contract A performance obligation is a promised good or service that is material in the context of the contract and is both capable of being distinct (customer can benefit from the good or service on its own or together with other readily available resources) and distinct within the context of the contract (separately identifiable from other promises). The Company reviews its contracts to identify promised goods or services and then evaluates such items to determine which of those items are performance obligations. The majority of the Company’s contracts have a single performance obligation since the promise to transfer an individual good or service is not separately identifiable from other promises in the contract. The Company’s performance obligations generally have an expected duration of one year or less. Step 3 - Determine the transaction price The Company’s contracts with its customers may include certain forms of variable consideration such as early payment discounts, volume discounts and shared cost savings. The Company includes an estimate of variable consideration when determining the transaction price and the appropriate amount of revenue to be recognized. This estimate is limited to an amount which will not result in a significant reversal of revenue in a future period. Factors considered in the Company’s estimate of variable consideration are the potential amount subject to these contract provisions, historical experience and other relevant facts and circumstances. Step 4 - Allocate the transaction price to the performance obligations in the contract A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. In the event that more than one performance obligation is identified in a contract, the Company is required to allocate a portion of the transaction price to each performance obligation. This allocation would generally be based on the relative standalone price of each performance obligation, which most often would represent the price at which the Company would sell similar goods or services separately. Step 5 - Recognize revenue when (or as) a performance obligation is satisfied The Company is required to assess whether control of a product or services promised under a contract is transferred to the customer at a point-in-time or over time as the product is being manufactured or the services are being provided. If the criteria in ASC 606 for recognizing revenue on an over time basis are not met, revenue must be recognized at the point-in-time determined by the Company at which its customer obtains control of a product or service. The Company has determined that revenue for the majority of its contracts is required to be recognized on an over time basis. This determination is based on the fact that 1) the Company does not have an alternative use for the end products it manufactures for its customers and has an enforceable right to payment, including a reasonable profit, for work-in-progress upon a customer’s cancelation of a contract for convenience or 2) the Company’s customer simultaneously receives and consumes the benefits provided by the Company’s services. For these contracts, revenue is recognized on an over time basis using the cost-to-cost method (ratio of costs incurred to date to total estimated costs at completion) which the Company believes best depicts the transfer of control to the customer. For contracts for which revenue is required to be recognized at a point-in-time, the Company recognizes revenue when it has transferred control of the related goods, which generally occurs upon shipment or delivery of the goods to the customer. Contract Assets A contract asset is recognized when the Company has recognized revenue, but has not issued an invoice for payment. Contract assets are classified separately on the condensed consolidated balance sheets and transferred to accounts receivable when rights to payment become unconditional. Because of the Company’s short manufacturing cycle times, the transfer from contract assets to accounts receivable generally occurs within the next fiscal quarter. Other Other than the impact upon adoption of ASC 606 at the beginning of the first quarter of 2019 (as discussed in Note 1), the application of ASC 606 during the first quarter of 2019 did not materially impact any financial statement line item, with the exceptions of contract assets (increased by $44 million post-adoption) and inventory (decreased by $39 million post-adoption). The Company has elected to apply the following practical expedients or policy elections under ASC 606:
• | Upon adoption, the Company elected to apply the requirements of ASC 606 only to open contracts as of the adoption date and to not perform an assessment of the impact of contract modifications prior to the period of adoption.
• | The promised amount of consideration under a contract will not be adjusted for the effects of a significant financing component because, at inception of a contract, the Company expects the period between when a good or service is transferred to a customer and when the customer pays for that good or service will generally be one year or less.
• | The Company has elected to not disclose information about remaining performance obligations that have original expected durations of one year or less, which is substantially all of the Company’s performance obligations.
• | Incremental costs of obtaining a contract will not be capitalized if the period over which such costs would be amortized to expense is less than one year.
Taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction, and are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of sales. Disaggregation of revenue In the following table, revenue is disaggregated by market sector and geography. The table also includes a reconciliation of the disaggregated revenue with the Company’s reportable segments.
| Three Months Ended
| December 29, 2018 |  | December 30, 2017
| (In thousands)
Segments: |  |  |
IMS | $ | 1,780,884 |  |  | $ | 1,422,043 |
CPS | 407,134 |  |  | 322,757 |
Total | $ | 2,188,018 |  |  | $ | 1,744,800 |
End Markets: |  |  |
Communications Networks | $ | 779,721 |  |  | $ | 678,846 |
Industrial, Medical, Automotive and Defense | 1,182,484 |  |  | 885,695 |
Cloud Solutions | 225,813 |  |  | 180,259 |
Total | $ | 2,188,018 |  |  | $ | 1,744,800 |
Geography: |  |  |
United States | $ | 454,771 |  |  | $ | 314,808 |
Mexico | 662,148 |  |  | 489,234 |
China | 433,422 |  |  | 315,092 |
Malaysia | 122,905 |  |  | 185,712 |
Other international | 514,772 |  |  | 439,954 |
Total | $ | 2,188,018 |  |  | $ | 1,744,800 |
Timing of Revenue Recognition: |  |  |
Goods/services transferred at a point in time | $ | 88,018 |  |  | $ | 1,723,000 |
Goods/services transferred over time | 2,100,000 |  |  | 21,800 |
Total | $ | 2,188,018 |  |  | $ | 1,744,800 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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