Notes to Financial Statements
NOTE 14 — UNEARNED REVENUE
Unearned revenue by segment was as follows:
(In millions) |
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June 30, |
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2019 |
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2018 |
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Productivity and Business Processes |
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$ |
16,831 |
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$ |
14,864 |
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Intelligent Cloud |
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16,988 |
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14,706 |
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More Personal Computing |
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3,387 |
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3,150 |
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Total |
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$ |
37,206 |
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$ |
32,720 |
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Changes in unearned revenue were as follows:
(In millions) |
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Year Ended June 30, 2019 |
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Balance, beginning of period |
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$ |
32,720 |
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Deferral of revenue |
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69,493 |
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Recognition of unearned revenue |
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(65,007 |
) |
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Balance, end of period |
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$ |
37,206 |
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Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized revenue”), which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted not recognized revenue was $91 billion as of June 30, 2019, of which we expect to recognize approximately 50% of the revenue over the next 12 months and the remainder thereafter. Many customers are committing to our products and services for longer contract terms, which is increasing the percentage of contracted revenue that will be recognized beyond the next 12 months.