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Contract Costs
 9 Months Ended
Sep. 30, 2023
Capitalized Contract Cost [Abstract]  
Contract Costs Revenue from Contracts with Customers
Disaggregation of Revenue from Contracts with Customers
The following table presents a disaggregation of revenue:
Three Months Ended September 30,Nine Months Ended September 30,
in millions2023202220232022
Americas
Recurring $231 $207 $717 $668 
Perpetual software licenses, hardware and other2 5 10 20 
Consulting services31 30 97 93 
Total Americas264 242 824 781 
EMEA
Recurring87 77 263 241 
Perpetual software licenses, hardware and other4 6 16 20 
Consulting services22 22 69 76 
Total EMEA113 105 348 337 
APJ
Recurring42 47 140 153 
Perpetual software licenses, hardware and other1 3 7 8 
Consulting services18 20 57 64 
Total APJ61 70 204 225 
Total Revenue$438 $417 $1,376 $1,343 

Rental revenue, which is included in recurring revenue in the above table, was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
in millions2023202220232022
Rental revenue* $56 $45 $163 $140 
*Rental revenue includes hardware maintenance.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets, and customer advances and deposits (deferred revenue or contract liabilities) on the condensed consolidated balance sheet. Accounts receivable include amounts due from customers that are unconditional. Contract assets relate to the Company’s rights to consideration for goods delivered or services completed and recognized as revenue but billing and the right to receive payment is conditional upon the completion of other performance obligations. Contract assets are included in other current assets on the balance sheet and are transferred to accounts receivable when the rights become unconditional. Deferred revenue consists of advance payments and billings in excess of revenue recognized. Deferred revenue is classified as either current or noncurrent based on the timing of when the Company expects to recognize revenue. These assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period.
The following table provides information about receivables, contract assets and deferred revenue from contracts with customers:
As of
in millionsSeptember 30, 2023December 31, 2022
Accounts receivable, net$286 $364 
Contract assets$11 $7 
Current deferred revenue$477 $589 
Long-term deferred revenue$16 $8 
Revenue recognized during the nine months ended September 30, 2023 from amounts included in deferred revenue at the beginning of the period was $401 million.
Transaction Price Allocated to Unsatisfied Obligations
The following table includes estimated revenue expected to be recognized in the future related to the Company's unsatisfied (or partially satisfied) obligations at September 30, 2023:
in millionsTotal at September 30, 2023Year 1Year 2 and Thereafter
Remaining unsatisfied obligations$2,394 $1,409 $985 
The amounts above represent the price of firm orders for which work has not been performed or goods have not been delivered and exclude unexercised contract options outside the stated contractual term that do not represent material rights to the customer. Although the Company believes that the contract value in the above table is firm, approximately $1,140 million of the amount is under contracts that are subject to customer-only general cancellation for convenience terms that the Company is contractually obligated to perform unless the customer notifies us of cancellation. The Company expects to recognize revenue of approximately $503 million in the next year from contracts that are non-cancelable. The Company believes the inclusion of this information is important to understanding the obligations that the Company is contractually required to perform and provides useful information regarding remaining obligations related to these executed contracts.
Contract Costs
The Company capitalizes sales commissions and other contract costs that are incremental direct costs of obtaining customer contracts if the expected amortization period of the asset is greater than one year. These costs are recorded in capitalized contract costs, net on the Company’s balance sheet. The capitalized amounts are calculated based on the annual recurring revenue and contract value for individual multi-term contracts. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract. Costs to obtain a contract are amortized as selling, general and administrative expenses on a straight-line basis over the expected period of benefit, which is typically around four years. These costs are periodically reviewed for impairment. The following table identifies the activity relating to capitalized contract costs:
in millionsDecember 31, 2022CapitalizedAmortizationSeptember 30, 2023
Capitalized contract costs$92 $12 $(32)$72 
in millionsDecember 31, 2021CapitalizedAmortizationSeptember 30, 2022
Capitalized contract costs$111 $23 $(46)$88