REVENUE RECOGNITION

6 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

The Company’s revenue recognition accounting policies are described in the notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

Accounts Receivable

Accounts receivable, net is stated net of the allowance for doubtful accounts and customer deductions totaling $66 million and $63 million as of December 31, 2020 and June 30, 2020, respectively. During the first quarter of fiscal 2021, the Company adopted ASC 326 using the modified retrospective transition approach and, accordingly, the prior comparative period was not restated. Under this new standard, the Company is required to measure credit losses based on the Company’s estimate of expected losses rather than incurred losses, which generally results in earlier recognition of allowances for credit losses. In accordance with ASC 326, the Company evaluated certain criteria, including aging and historical write-offs, current economic condition of specific customers and future economic conditions of countries utilizing a consumption index to determine the appropriate allowance for credit losses. The Company writes-off receivables once it is determined that the receivables are no longer collectible and as allowed by local laws. Payment terms are short-term in nature and are generally less than one year.

Changes in the allowance for credit losses are as follows:


(In millions)	December 31 2020
Balance at June 30, 2020	$	36
ASC 326 cumulative effect adjustment (pre-tax)	4
Provision for expected credit losses	7
Write-offs, net & other	(8)
Balance at December 31, 2020	$	39

As a result of the adoption of ASC 326, the Company recorded a cumulative adjustment of approximately $3 million, net of tax, as a reduction to its fiscal 2021 opening balance of retained earnings relating to its trade receivables.

The remaining balance of the allowance for doubtful accounts of $27 million, as of December 31, 2020, relates to non-credit losses, which are primarily due to customer deductions.

Deferred Revenue

Changes in deferred revenue during the period are as follows:


	Three Months Ended December 31				Six Months Ended December 31
(In millions)	2020		2019		2020		2019
Deferred revenue, beginning of period	$	409	$	392	$	279	$	361
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(83)		(83)		(173)		(243)
Revenue deferred during the period	92		112		308		307
Other	2		4		6		—
Deferred revenue, end of period	$	420	$	425	$	420	$	425

Transaction Price Allocated to the Remaining Performance Obligations

At December 31, 2020, the combined estimated revenue expected to be recognized in the next twelve months related to performance obligations for customer loyalty programs, gift with purchase promotions, purchase with purchase promotions and gift card liabilities that are unsatisfied (or partially unsatisfied) is $365 million, and the remaining balance will be recognized beyond the next twelve months.