Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 |
Summary of Significant Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
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1. Summary of Significant Accounting Policies |
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The Company |
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Alliance Fiber Optic Products, Inc. (the "Company") was incorporated in California on December 12, 1995 and reincorporated in Delaware on October 19, 2000. The Company designs, manufactures and markets fiber optic components for communications equipment manufacturers and service providers. The Company's headquarters are located in Sunnyvale, California, and it has operations in Taiwan and China. |
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Basis of Presentation |
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The accompanying condensed consolidated balance sheet as of December 31, 2012, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and include the accounts of Alliance Fiber Optic Products, Inc. and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. |
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These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012. The unaudited condensed consolidated financial statements as of September 30, 2013, and for the three and nine months ended September 30, 2013 and 2012, reflect, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial information set forth herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for any subsequent interim period or for an entire year. |
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There have been no significant changes in the Company's critical accounting policies during the nine months ended September 30, 2013 as compared to what was previously disclosed in the Company's Form 10-K for the fiscal year ended December 31, 2012. |
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Revenue Recognition |
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The Company recognizes revenue upon shipment of its products to customers, provided that it has received a purchase order, the price is fixed, collection of the resulting receivable is reasonably assured and transfer of title and risk of loss has occurred. Subsequent to the sale of products, the Company has no obligation to provide any modification or customization upgrades, enhancements or post contract customer support. |
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Allowance for Doubtful Accounts |
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Allowances are provided for estimated returns and potential uncollectable trade receivables. Provisions for return allowances are recorded at the time revenue is recognized based on historical returns, current economic trends and changes in customer demand. Such allowances are adjusted periodically to reflect actual and anticipated experience. The Company also identifies specific accounts considered to have a high risk of uncollectibility and reserves the full amount. Material differences may result in the amount and timing of revenue for any period than if management had made different judgments or utilized different estimates. |
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Cash and Cash Equivalents |
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The Company considers all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist primarily of market rate accounts, corporate bonds and certificates of deposit. |
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Short-Term and Long-Term Investments |
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The Company generally invests its excess cash in certificates of deposit, corporate bonds, and commercial paper. Such investments are made in accordance with the Company's investment policy, which establishes guidelines relative to diversification and maturities designed to maintain safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates. |
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Concentrations of Risk |
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Connectivity products contributed 76.2% and 67.0% of the Company's revenues for the three months ended September 30, 2013 and 2012, respectively. The Company's optical passive products contributed 23.8% and 33.0% of the Company's revenues for the three months ended September 30, 2013 and 2012, respectively. |
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Connectivity products contributed 75.5% and 71.4% of the Company's revenues for the nine months ended September 30, 2013 and 2012, respectively. The Company's optical passive products contributed 24.5% and 28.6% of the Company's revenues for the nine months ended September 30, 2013 and 2012, respectively. |
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In the three months ended September 30, 2013 and 2012, the Company's 10 largest customers comprised 79.1% and 66.3% of the Company's revenues, respectively. For the three months ended September 30, 2013, two customers accounted for 40.1% and 11.2% of the Company's total revenues, respectively. Amounts due from these customers were $4.5 million and $1.4 million, respectively, at September 30, 2013. For the three months ended September 30, 2012, three customers accounted for 14.1%, 11.0% and 10.1% of the Company's total revenues, respectively. Amounts due from these customers were $1.5 million, $1.0 million and $0.8 million, respectively, at September 30, 2012. |
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In the nine months ended September 30, 2013 and 2012, the Company's 10 largest customers comprised 74.5% and 62.9% of the Company's revenues, respectively. For the nine months ended September 30, 2013, two customers accounted for 32.4% and 10.4% of the Company's total revenues. For the nine months ended September 30, 2012, no customer accounted for 10% or more of the Company's revenues. |
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