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Electronics & Electrical Equipment: Credit losses (CECL, ASC 326)

Note: ASC 326 current expected credit loss model disclosures.
Lumentum Holdings Inc. (LITE) · Form 10-K for period ended 2026-06-27 · filed 2026-08-17 · Section: Note 1. Description of Business and Summary of Significant Accounting Policies

We are actively monitoring and assessing the ongoing global trade environment, particularly with respect to recent changes in tariff regulations. We have assessed the potential impacts of heightened restrictions and tariffs on our allowance for credit losses, the carrying value of our goodwill and other long-lived assets, inventory valuation, and revenue recognition. While we have determined there was not a material impact to our consolidated financial statements as of June 27, 2026 and for the year ended June 27, 2026, import tariffs implemented by the U.S. and other countries, as currently in effect and/or proposed, could have a material impact on our results in the future. The impact of tariffs is dependent on negotiations with customers and suppliers and other mitigation efforts and potential further changes in global trade policies, including higher tariffs in the U.S. or other countries.

Fiscal Years

We utilize a 52-53 week fiscal year ending on the Saturday closest to June 30th. Every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the third quarter, making such quarter consist of 14 weeks. Our fiscal years 2026, 2025 and 2024 were 52-week years, ending on June 27, 2026, June 28, 2025 and June 29, 2024, respectively. Our fiscal year 2027 ending on July 3, 2027 has a 53-week period.

Principles of Consolidation

The consolidated financial statements are prepared in accordance with GAAP and includes the accounts of Lumentum Holdings Inc. and its wholly owned subsidiaries. Intercompany transactions and balances are fully eliminated in consolidation.

Business Combination

On March 17, 2026, we acquired a manufacturing facility in Greensboro, North Carolina for $ 38.0 million in cash from a third party. The acquired business mainly included land and building, machinery and equipment, and an assembled workforce. We have applied the acquisition method of accounting to account for these transactions in accordance with ASC Topic 805, Business Combinations. Our consolidated financial statements include the operating results of the acquired entities from the acquisition close date. Refer to “Note 4. Business Combination”.

Summary of Significant Accounting Policies

Verbatim excerpt (347 words), formatting simplified. View full filing on EDGAR →

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