XML 18 R8.htm IDEA: XBRL DOCUMENT
v3.22.0.1

BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER | 9 Months Ended
--- | ---
Feb. 28, 2022
Organization Consolidation And Presentation Of Financial Statements [Abstract] |
BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER |
1. | BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER
Basis of Presentation We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures herein are adequate to ensure the information presented is not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2021. We believe that all necessary adjustments, which consisted only of normal recurring items, have been included in the accompanying financial statements to present fairly the results of the interim periods. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for our fiscal year ending May 31, 2022. The comparability of our condensed consolidated financial statements as of and for the nine months ended February 28, 2022 was impacted by $4.7 billion of certain litigation related charges that are more fully described in Note 11 below. The comparability of our condensed consolidated financial statements for the three and nine months ended February 28, 2021 was impacted by a $2.3 billion net income tax benefit related to the partial realignment of our legal entity structure that resulted in the intra-group transfer of certain intellectual property rights (refer to Notes 1 and 14 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended May 31, 2021 for additional information). During the first nine months of fiscal 2022, we adopted Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes; and ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, neither of which had a material impact to our condensed consolidated financial statements as of and for the nine months ended February 28, 2022. There have been no changes to our significant accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2021 that had a significant impact on our condensed consolidated financial statements or notes thereto as of and for the nine months ended February 28, 2022. Cash, Cash Equivalents and Restricted Cash Restricted cash that was included within cash and cash equivalents as presented within our condensed consolidated balance sheets as of February 28, 2022 and May 31, 2021 and our condensed consolidated statements of cash flows for the nine months ended February 28, 2022 and 2021 was nominal. Remaining Performance Obligations from Contracts with Customers Trade receivables, net of allowance for doubtful accounts, and deferred revenues are reported net of related uncollected deferred revenues in our condensed consolidated balance sheets as of February 28, 2022 and May 31, 2021. The revenues recognized during the nine months ended February 28, 2022 and 2021, respectively, that were included in the opening deferred revenues balances as of May 31, 2021 and 2020, respectively, were approximately $8.1 billion and $7.4 billion, respectively. Revenues recognized from performance obligations satisfied in prior periods and impairment losses recognized on our receivables were immaterial in each of the three and nine months ended February 28, 2022 and 2021, respectively. Remaining performance obligations, as defined in Note 1 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2021, were $38.5 billion as of February 28, 2022, approximat ely 59% of which we expect to recognize as revenues over the next twelve months, 30% over the subsequent month 13 to month 36, an d the remainder thereafter. Sales of Financing Receivables We offer certain of our customers the option to acquire certain of our cloud and license, hardware and services offerings through separate long-term payment contracts. We generally sell these contracts that we have financed for our customers on a non-recourse basis to financial institutions within 90 days of the contracts’ dates of execution. We record the transfers of amounts due from customers to financial institutions as sales of financing receivables because we are considered to have surrendered control of these financing receivables. Financing receivables sold to financial institutions were $352 million and $1.4 billion for the three and nine months ended February 28, 2022, respectively, and $338 million and $1.3 billion for the three and nine months ended February 28, 2021, respectively. Non-Marketable Investments Our non-marketable debt investments and equity securities and related instruments totaled $1.3 billion and $971 million as of February 28, 2022 and May 31, 2021, respectively, and are included either in other current assets or in other non-current assets in the accompanying consolidated balance sheets and are subject to periodic impairment reviews. Certain of these instruments are adjusted for observable price changes from orderly transactions. The substantial majority of the non-marketable debt investments and equity securities and related instruments held as of these dates were with a related party entity for which we follow the equity method of accounting. We are also a counterparty to certain options to acquire additional equity interests in that entity at various times through December 2023 and we could obtain control of that entity should such options be exercised. Acquisition Related and Other Expenses Acquisition related and other expenses consist of personnel related costs for transitional and certain other employees, certain business combination adjustments, including adjustments after the measurement period has ended, and certain other operating items, net. For the nine months ended February 28, 2022, acquisition related and other expenses included certain litigation related charges that we generally do not expect to recur as further described in Note 11 below.
|  | Three Months Ended February 28, |  |  | Nine Months Ended February 28, |
(in millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Transitional and other employee related costs |  | $ | 2 |  |  | $ | 1 |  |  | $ | 6 |  |  | $ | 4 |
Business combination adjustments, net |  |  | 5 |  |  |  | 2 |  |  |  | 8 |  |  |  | 3 |
Other, net |  |  | 13 |  |  |  | 10 |  |  |  | 4,693 |  |  |  | 100 |
Total acquisition related and other expenses |  | $ | 20 |  |  | $ | 13 |  |  | $ | 4,707 |  |  | $ | 107 |
Non-Operating Expenses, net Non-operating expenses, net consists primarily of interest income, net foreign currency exchange losses, the noncontrolling interests in the net profits of our majority-owned subsidiaries (primarily Oracle Financial Services Software Limited and Oracle Corporation Japan) and net other income and expenses, including net realized gains and losses related to all of our investments, net unrealized gains and losses related to the small portion of our investment portfolio related to our deferred compensation plan, net unrealized gains and losses related to equity securities, losses attributable to equity method investments, and non-service net periodic pension income and losses.
|  | Three Months Ended February 28, |  |  | Nine Months Ended February 28, |
(in millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Interest income |  | $ | 16 |  |  | $ | 23 |  |  | $ | 56 |  |  | $ | 80 |
Foreign currency losses, net |  |  | (29 | ) |  |  | (18 | ) |  |  | (109 | ) |  |  | (84 | )
Noncontrolling interests in income |  |  | (42 | ) |  |  | (46 | ) |  |  | (131 | ) |  |  | (127 | )
Other, net |  |  | (260 | ) |  |  | 24 |  |  |  | (164 | ) |  |  | 101 |
Total non-operating expenses, net |  | $ | (315 | ) |  | $ | (17 | ) |  | $ | (348 | ) |  | $ | (30 | )
Recent Accounting Pronouncements Financial Instruments: In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued. We will adopt Topic 848 when our relevant contracts are modified upon transition to alternative reference rates and expect this to occur through December 31, 2022. We do not expect our adoption of Topic 848 to have a material impact on our consolidated financial statements.

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -URI http://asc.fasb.org/topic&trid=2122149 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI http://asc.fasb.org/topic&trid=2197479 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI http://asc.fasb.org/topic&trid=2134479 + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureAndSignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration