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Other technologies for the broadband gateway market compete with DSL services. DSL services compete with a variety of different broadband services, including cable, satellite and other wireless technologies.
Then multiply either your total ofr or total accounts receivable by this percentage to establish the accounts. We believe there are significant international opportunities for both our wireline and wireless IC solutions and we intend to continue to expand our global marketing and distribution efforts to address the range of markets and applications for our innovative mixed-signal solutions. In addition, any delay in developing, introducing or marketing these or other products would seriously harm our business. This growth is being driven in part by the demand for communications services, which has increased at a rapid rate in recent years due to a number of factors, including the growth of Internet usage, development of new communications technologies, availability of improved communications services at lower costs and remote access requirements for corporate networks. In the Account field, select 'Bad debts recovered' you may need to create this accountor use the account recommended by your accountant or bookkeeper. In Januaryour Wireline Products Division introduced our ProSLIC product. Our stock price may be volatile, which may result in substantial losses for our stockholders.
Many of these technologies compete effectively with DSL services. If any technology competing with DSL technology is more reliable, faster, less expensive, reaches more customers or has other advantages over DSL technology, then the demand for our DSL products and services and our revenues and gross margins will decrease.
We cannot guarantee that we will be able to develop and introduce products for these competing technologies. We purchase the semiconductor chips for our broadband equipment from a limited number of suppliers, and the inability to obtain in a timely manner a sufficient quantity of chips at an economic price would adversely affect our business.
All of our broadband equipment products rely on special semiconductor chips that we purchase from fewer than five suppliers. We do not have volume purchase contracts with any of our suppliers and they could cease selling to us at any time. In addition, our suppliers change their selling prices frequently in response to market trends, which may include increased demand industry-wide. Because we generally have been unable to pass component price increases along to our customers, our gross margins and operating results have been harmed as a result of component price increases.
If we are unable to obtain a sufficient quantity of these semiconductor chips in a timely manner for "bad debt write off journal entry zyxel" reason, sales of our broadband equipment products could be delayed or halted. Further, we could also be forced to redesign our broadband equipment products and qualify new suppliers of semiconductor chip sets. The resulting stoppage or delay in selling our products and the expense of redesigning our products would adversely affect our business. If we were unable to obtain components and manufacturing services for our broadband equipment from independent contractors and specialized suppliers, our business would be harmed.
We do not manufacture any of the components used in our products and perform only limited assembly on some products. All of our broadband equipment relies on components that are supplied by independent contractors and specialized suppliers. Furthermore, substantially all of our broadband equipment includes printed circuit boards that are manufactured by fewer than five contract manufacturers that assemble and package our products. We do not have guaranteed supply arrangements with these third parties and they could cease selling components to us at any time.
Moreover, the ability of independent contractors and specialized suppliers to provide us with sufficient components for our broadband equipment also depends on our ability to accurately forecast our future requirements. If we are unable to obtain a sufficient quantity of components from independent contractors or specialized suppliers in a timely manner for any reason, sales of our broadband equipment could be delayed or halted. Similarly, if supplies of circuit boards or products from our contract manufacturers are interrupted for any reason, we will incur significant losses until we arrange for alternative sources.
In addition, we may be required to pay premiums for components purchased from other vendors should our regular Table of Contents independent contractors and specialized suppliers be unable to timely provide us with sufficient quantity of components. To the extent we pay any premiums, our gross margins and operating results would be harmed.
Further, we could also be forced to redesign our broadband equipment and qualify new suppliers of components. The resulting stoppage or delay in selling our products and the expense of redesigning our broadband equipment would seriously harm our reputation and business. Failure to develop, introduce and market new and enhanced products and services in bad debt write off journal entry zyxel timely manner could harm our competitive position and operating results. We compete in markets characterized by continuing technological advancement, changes in customer requirements and evolving industry standards.
To compete successfully, we must design, develop, manufacture and sell new or enhanced products and services that provide increasingly higher levels of performance, reliability, compatibility, and cost savings for our customers.
We will bar to continue to integrate our DSL modem and router technology with the architectures of leading central office equipment providers in order to enhance the reliability, ease-of-use and management functions of our broadband equipment. Our Netopia Broadband Server NBBS software platform enables network operations centers of broadband service providers the ability to remotely manage, support, and troubleshoot installed broadband gateways, thereby providing the potential for reducing support costs.
We believe that NBBS can assist us in differentiating our products and services from those of our competitors. However, NBBS is a relatively new product that has required and is expected to continue to require significant investment just click for source development resources and to date has not generated significant revenues, and we cannot provide any assurance that NBBS will be widely bad debt write off journal entry zyxel by the customers to whom we are marketing it.
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In addition, we cannot provide any zyxsl that when and if deployed in mass scale, NBBS will perform as expected or that it has no hidden bugs or defects. We may not be able to develop, introduce, enhance or market successfully these or other products and services necessary to our future success. In addition, any delay in developing, introducing or marketing these or other products would seriously harm our business.
Many of our broadband equipment products and services are relatively new.
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You should consider our prospects in light of the difficulties we may encounter because these products are at an early stage of development in a rapidly evolving and intensely competitive market. For example, we may not correctly anticipate market requirements, or introduce rapidly new products that meet such requirements for performance, price, features and rntry with other broadband equipment. Failure to continue to develop and market competitive products would harm our competitive position and operating results.
We may experience declining gross margins due to joirnal competition and an increase in sales of lower margin broadband equipment as a percentage of our total revenues. We expect that sales of our broadband equipment may account for a larger percentage of our total revenues in future periods. Because our broadband equipment products are sold at offf gross margins than our broadband software and services products, and sales volumes of our lower margin residential-class DSL products are increasing, our overall gross margin rate will likely decrease.
Further, we expect that the market for broadband equipment will remain highly competitive and as a result, we will continue to lower the prices we charge for our broadband equipment. If the average selling price of our broadband equipment continues to decline faster than our ability to realize lower manufacturing and product costs, our gross margins related to such products, as well as our overall gross margins, are likely to decline.
We may incur greater losses if we cannot successfully sell our broadband software and services products. We lff a substantial portion of the recurring revenues from our entry zyxel software and services products from a small number of large customers. The majority of our broadband software and services revenues are derived from the sale of higher margin software products for corporate help desks, mostly Timbuktu. We anticipate that the market for Timbuktu may continue to decline or grow more slowly than the market for our other broadband software products and services.
We also have not generated significant revenue to date from the NBBS software platform in which we have made and expect to continue to make a significant write off of development resources. In ba, we rely on a small number of licensees to promote the use of our broadband software and services for building web sites and stores. We derive the majority of the recurring revenues from our broadband software and services products from fewer than five customers. The extent and nature of the promotions by licensees of our broadband software and services are outside of our control.
If licensees of our eSite and eStore software do not successfully promote web sites and stores to their customers, our recurring revenues may decrease. If these customers were to choose a competitive platform, our recurring revenues would decline and adversely impact our results. If hosting services for our broadband software and services perform poorly, our revenue bda decline and we could be sued. We depend on our servers, networking hardware and software infrastructure, and third-party service and maintenance of these items to provide reliable, high-performance hosting for eSite and eStore customers and subscribers to our parental controls service.
In addition, our servers are located at third-party facilities. Failure or poor performance by third parties with which we contract for maintenance services could also lead to interruption or deterioration of our parental controls, eSite and eStore hosting services.
Additionally, a slowdown or failure of our systems for any reason could also lead to interruption or deterioration of our parental controls, eSite and eStore hosting services. In such a circumstance, wrte hosting and subscription revenues may decline. In addition, if our parental controls, eSite and eStore hosting services are interrupted, perform poorly, or are unreliable, we are at risk of litigation from our customers, the outcome of which could harm our business.
Failure to attract or retain key personnel could harm our business. Our future performance depends on the continued service of our senior management, product development and sales personnel. The loss of the services of one or more of our key personnel could seriously harm our business.
Competition for qualified personnel in our industry and geographic location is intense. Although we believe our personnel turnover rate is consistent with industry norms, our future success depends on our continuing ability to attract, hire, train and retain highly skilled managerial, technical, sales, marketing and customer support personnel.
In addition, new hires frequently require extensive training before they achieve desired levels of productivity. Our intellectual property may not be adequately protected, and our products may infringe upon the intellectual property rights of third parties, which may adversely impact our competitive position and require us to engage in costly litigation. We depend on our ability to develop and maintain the proprietary aspects of our technology.
To protect our proprietary technology, we rely primarily on a combination of see more provisions, confidentiality procedures, trade secrets, and patent, copyright and trademark law. We presently have bad debt write off journal entry zyxel United States patent issued that relates to our remote control technology incorporated in most of our software products. The term of this patent is through August We also have filed patent applications relating to the design of our Wi-Fi gateways.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information that we regard as proprietary. Policing unauthorized use of our products is difficult, and there click here no guarantee that the safeguards that we employ bad debt write off journal entry zyxel protect our intellectual property and other valuable competitive information.
There has been a substantial amount of litigation in the software and Internet industries regarding intellectual property rights. Although we have not been party to any such litigation, in the future third parties may claim that our current or potential future products bad their intellectual property.
The evaluation and defense Table of Contents of any such claims, with or without merit, could be time-consuming and expensive. Furthermore, such claims could cause product shipment delays or require us to enter into royalty or licensing agreements on financially unattractive terms, which could seriously harm our business. If we are unable to license necessary software, firmware and hardware designs from third parties, our business could be harmed.
We have recorded deferred stock compensation for the difference between wrote exercise price of certain option grants, or the issuance price of certain direct issuances of stock, and the deemed fair value of our common stock at the time of such grants or issuances. We recognize stock-based compensation expense based on the deemed fair value of the stock at the date of grant. We currently hold one U. We are dependent on the availability of such capacity to manufacture and assemble our IC solutions.
We rely upon certain software, firmware and hardware designs that we license from third parties, including firmware that is integrated with our internally developed firmware and used in our products. We cannot be certain that these third-party licenses will continue to be available to us on commercially reasonable terms. The loss of, or inability to maintain, such licenses could result in product shipment delays until equivalent firmware is developed or licensed, and integrated jouranl our products, which would seriously harm our business.
Our products are complex and may contain undetected or unresolved defects. Our products are complex and may contain jurnal or unresolved defects when first introduced or as new versions are released. Although we historically have not experienced material problems with product defects, if our products do contain undetected or unresolved defects, we may lose market share, experience delays in or losses of market acceptance or be required to issue a product recall.
Similarly, although we have not experienced material warranty claims, if warranty claims exceed our reserves for such claims, our business would be seriously harmed. In addition, link would be at risk of product liability litigation because of defects in our products. Although we attempt to limit our liability to end users through disclaimers of special, consequential and indirect damages and similar provisions, we cannot assure wrte that such limitations of liability will be legally enforceable.
Our industry may bad debt write off journal entry zyxel subject to changes in regulations, which could harm our business. Our industry and industries on which our business depends may be affected by changes in regulations. For example, we depend on telecommunications service providers for sales of our broadband equipment, and companies in the telecommunications "bad debt write off journal entry zyxel" must comply with numerous regulations. If our industry or industries on which we depend become subject to regulatory changes that entrg the cost of doing business or doing business with us, our revenues could decline and our business could be harmed.
For example, if a source agency imposed restrictions on DSL service that were not also imposed on other forms of high-speed Internet access, our business could be harmed. Business interruptions that prevent our ability to deliver products and services to our customers could adversely affect our business. Our operations are vulnerable to interruption by fire, earthquake, power loss, telecommunications failure, terrorist attacks, labor disputes by transportation providers, and other events beyond our control.
In particular, our headquarters are located near earthquake fault lines in the San Francisco Bay area and may be susceptible to the risk of earthquakes. If there is an earthquake in the region, our business could be seriously harmed. We do not have kff detailed disaster recovery plan.