Contract With Customer, Liability, Foreign Currency Translation

[Table of Contents](#i3788981a52d64e719f4aa81d6ab63fcb_7)Contract liabilities, or deferred revenue, consist of advance payments and billings in excess of revenues recognized. The table below shows movements in the deferred revenue balances (current and noncurrent) for the nine months ended September 30: 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions) |  | 2022 |  | 2021 |
| Beginning balance |  | $ | 443  |  |  | $ | 419  |  |
| Amounts billed but not recognized as revenues |  | 326  |  |  | 309  |  |
| Revenues recognized related to the beginning balance of deferred revenue |  | (397) |  |  | (379) |  |
| Effect of foreign currency exchange movements |  | (10) |  |  | —  |  |
| Ending balance |  | $ | 362  |  |  | $ | 349  |  |

Revenues recognized during the nine months ended September 30, 2022 for performance obligations satisfied or partially satisfied in previous periods were immaterial.Remaining Performance ObligationsAs of September 30, 2022, the aggregate amount of transaction price allocated to remaining performance obligations was $1,574 million, of which approximately 85% is expected to be recognized as revenues within 2 years. Disclosure is not required for performance obligations that meet any of the following criteria: (1)contracts with a duration of one year or less as determined under ASC Topic 606: "Revenue from Contracts with Customers",(2)contracts for which we recognize revenues based on the right to invoice for services performed, (3)variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with ASC 606-10-25-14(b), for which the criteria in ASC 606-10-32-40 have been met, or (4)variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Many of our performance obligations meet one or more of these exemptions and therefore are not included in the remaining performance obligation amount disclosed above.Trade Accounts Receivable and Allowance for Credit Losses We calculate expected credit losses for trade accounts receivable based on historical credit loss rates for each aging category as adjusted for the current market conditions and forecasts about future economic conditions. The following table presents the activity in the allowance for credit losses for trade accounts receivable for the nine months ended September 30:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions) |  | 2022 |  | 2021 |
| Beginning balance |  | $ | 50  |  |  | $ | 57  |  |
| Credit loss expense (income)  |  | —  |  |  | 5  |  |
| Write-offs charged against the allowance |  | (11) |  |  | (12) |  |
|  |  |  |  |  |
| Ending balance |  | $ | 39  |  |  | $ | 50  |  |

  
  
  
  
  
  
  


|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| Cognizant Technology Solutions | 10 | September 30, 2022 Form 10-Q |

                         
