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Contract Balances | 6 Months Ended
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Apr. 26, 2020
Revenue from Contract with Customer [Abstract] |
Contract Balances | Contract Balances Contract assets primarily result from receivables for goods transferred to customers where payment is conditional upon technical sign off and not just the passage of time. Contract liabilities consist of unsatisfied performance obligations related to advance payments received and billings in excess of revenue recognized. Applied’s contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets are generally classified as current and are included in Other Current Assets in the Consolidated Condensed Balance Sheets. Contract liabilities are classified as current or non-current based on the timing of when performance obligations will be satisfied and associated revenue is expected to be recognized. Contract balances at the end of each reporting period were as follows:
| April 26, 2020 |  | October 27, 2019
| (In millions) |  |
Contract assets | $ | 152 |  |  | $ | 108 |
Contract liabilities | $ | 1,334 |  |  | $ | 1,336 |
The increase in contract assets during the six months ended April 26, 2020, was primarily due to goods transferred to customers where payment was conditional upon technical sign off, offset by the reclassification of contract assets to net accounts receivable upon meeting conditions to the right to payment. During the six months ended April 26, 2020, Applied recognized revenue of approximately $894 million related to contract liabilities at October 27, 2019. This reduction in contract liabilities was offset by new billings for products and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized as of April 26, 2020. There were no impairment losses recognized on Applied’s accounts receivables and contract assets during both the three and six months ended April 26, 2020 and April 28, 2019. As of April 26, 2020, the amount of remaining unsatisfied performance obligations on contracts with an original estimated duration of one year or more was approximately $683 million, of which approximately 56% is expected to be recognized within 12 months and the remainder is expected to recognized within the following 24 months thereafter. Applied has elected the available practical expedient to exclude the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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