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REVENUE (Notes)

12 Months Ended

Oct. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

REVENUE

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by geographic region, end market, and timing of transfer of products and services to customers, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Disaggregated revenue is presented for each of our three reportable segments.



	Year Ended October 31, 2019
	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Total
	(in millions)
Region
Americas	$	1,185	$	250	$	289	$	1,724
Europe	385		257		71		713
Asia Pacific	1,118		628		120		1,866
Total net revenue	$	2,688	$	1,135	$	480	$	4,303

End Market
Aerospace, Defense & Government	$	975	$	—	$	—	$	975
Commercial Communications	1,713		—		—		1,713
Electronic Industrial	—		1,135		—		1,135
Ixia	—		—		480		480
Total net revenue	$	2,688	$	1,135	$	480	$	4,303

Timing of Revenue Recognition
Revenue recognized at a point in time	$	2,452	$	1,037	$	296	$	3,785
Revenue recognized over time	236		98		184		518
Total net revenue	$	2,688	$	1,135	$	480	$	4,303

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue (contract liabilities) on our condensed consolidated balance sheet. In addition, we defer and capitalize certain costs incurred to obtain a contract (contract costs).

Contract assets - Contract assets represent unbilled amounts from arrangements for which we have performed by transferring goods or services to the customer in advance of receiving all or partial consideration for such goods and services from the customer. Contract assets arise primarily from service agreements and products delivered pending a formal customer acceptance, which generally occurs within 30 days. The contract assets balance was $34 million and $6 million at October 31, 2019 and November 1, 2018, respectively, and is included in "accounts receivables, net" in our condensed consolidated balance sheet.

Contract costs - We recognize an asset for the incremental costs of obtaining a contract with a customer. We have determined that certain employee and third-party representative commissions programs meet the requirements to be capitalized. Employee commissions are based on the achievement of order volume compared to a sales target. Third-party representative commission costs relate directly to a customer contract as the commission is tied to orders contracted through and contracts arranged by our third-party representatives. Without obtaining the contracts, the commissions would not be paid and, as such, are determined to be an incremental cost to obtaining a contract. We only defer these costs when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract.

Capitalized incremental costs are allocated to the individual performance obligations in proportion to the transaction price allocated to each performance obligation and amortized based on the pattern of performance for the underlying performance obligation. Contract costs related to initial contracts and renewals are amortized over the same period because the commissions paid on both the initial contract and renewals are commensurate with one another.

The following table provides a roll-forward of our capitalized contract costs, current and non-current:



	Year Ended
	October 31, 2019
	(in millions)
Balance at October 31, 2018	$	—
Costs capitalized on November 1, 2018 due to ASC 606 adoption	29
Costs capitalized during the period	63
Costs amortized during the period	(64		)
Balance at October 31, 2019	$	28

Contract liabilities - Our contract liabilities consist of deferred revenue that arises when we receive consideration in advance of providing the goods or services promised in the contract. Contract liabilities are primarily generated from customer deposits received in advance of shipments for products or rendering of services and are recognized as revenue when services are provided to the customer. We classify deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. Contract liabilities are recognized as revenue when services are provided to the customer.

Changes in contract liabilities, current and non-current, during 2019 were as follows:



	Year Ended
	October 31, 2019
	(in millions)
Balance at October 31, 2018	$	461
Impact of adopting new revenue standard	(64		)
Balance at November 1, 2018	397
Deferred revenue arising out of acquisitions	1
Deferral of revenue billed in current period, net of recognition	386
Revenue recognized that was deferred as of the beginning of the period	(274		)
Balance at October 31, 2019	$	510

Remaining Performance Obligations

Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, was approximately $321 million as of October 31, 2019, and represents the company’s obligation to deliver products and services and obtain customer acceptance on delivered products. Since we typically invoice customers at contract inception, this amount is included in our current and long-term deferred revenue balances. As of October 31, 2019, we expect to recognize approximately 45% of the revenue related to these unsatisfied performance obligations during 2020, 29% in 2021 and 26% thereafter.

Practical Expedients

As discussed in Note 2, "New Accounting Pronouncements," and previously in this note, we have elected the following practical expedients in accordance with ASC 606:


•	We do not disclose the value of remaining performance obligations for contracts with an original expected length of one year or less.


•	We determine incremental costs of obtaining a contract for a portfolio of contracts with similar characteristics as we reasonably expect that the effects on the financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within that portfolio.


•	We exclude from the transaction price certain taxes (e.g., sales, use, value added, and some excise taxes).


•	We do not adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.


•	We treat shipping and handling costs associated with outbound freight after control of a product has transferred to a customer as a fulfillment cost, included in cost of products.


•	We have applied the guidance only to contracts that have not been completed as of the date of adoption (November 1, 2018).

•

We did not evaluate individual modifications for those periods prior to the adoption date, but rather evaluated the aggregate effect of all modifications as of the adoption date.