Performance obligation expected recognition period for three-fourths of remaining obligation

[Table of Contents](#iedfcb48a3788458f95ee4009debca3d0_7)FORTINET, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)  
Disaggregation of Revenue  
The following table presents our revenue disaggregated by major product and service lines (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended |  |  |
|  | March 31,2022 |  | March 31,2021 |  |  |  |  |
| Product | $ | 371.0  |  |  | $ | 240.7  |  |  |  |  |  |
| Service: |  |  |  |  |  |  |  |
| Security subscription | 312.9  |  |  | 255.3  |  |  |  |  |  |
| Technical support and other | 270.9  |  |  | 214.3  |  |  |  |  |  |
| Total service revenue | 583.8  |  |  | 469.6  |  |  |  |  |  |
| Total revenue | $ | 954.8  |  |  | $ | 710.3  |  |  |  |  |  |

  
Deferred Revenue  
During the three months ended March 31, 2022 and 2021, we recognized $507.3 million and $417.9 million in service revenue that was included in the deferred revenue balance as of December 31, 2021 and 2020, respectively.   
Transaction Price Allocated to the Remaining Performance Obligations  
As of March 31, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $3.66 billion, which was substantially comprised of deferred security subscription and technical support services revenue. We expect to recognize approximately $1.89 billion as revenue over the next 12 months and the remainder thereafter.  
Accounts receivable  
Trade accounts receivable are recorded at the invoiced amount. Our accounts receivable balance is reduced by an allowance for expected credit losses. We measure expected credit losses of accounts receivable on a collective (pooled) basis, aggregating accounts receivable that are either current or no more than 60 days past due, and aggregating accounts receivable that are more than 60 days past due. We apply a credit-loss percentage to each of the pools that is based on our historical credit losses. We review whether each of our significant accounts receivable that is more than 60 days past due continues to exhibit similar risk characteristics with the other accounts receivable in the pool. If we determine that it does not, we evaluate it for expected credit losses on an individual basis. Expected credit losses are recorded as general and administrative expenses on our consolidated statements of income.  
The allowance for credit losses was $2.5 million and $2.4 million as of March 31, 2022 and December 31, 2021, respectively. Provisions, write-offs and recoveries were not material during the three months ended March 31, 2022 and 2021.  
Deferred Contract Costs      Amortization of deferred contract costs during the three months ended March 31, 2022 and 2021 were $52.5 million and $39.7 million, respectively.  
9
