Payment terms

  
category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.End-to-End Security product category consists of our Network Security, Cloud Security, Security Endpoints, Unified Threat Management and Zero Trust offerings. These products consist of both hardware and software offerings, including software licenses and SaaS. Updates and upgrades for the term software licenses are critical for our software to perform its intended commercial purpose because of the continuous need for our software to secure our customers’ network environments against frequent threats. Therefore, security software licenses are generally represented by a single distinct performance obligation with revenue recognized ratably over the contract term. Our hardware and perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.Optimized Application Experiences consists of our full stack observability and cloud-native platform offerings. These products consist primarily of software offerings, including software licenses and SaaS. Our perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses are multiple performance obligations where the term license is recognized upfront upon transfer of control with the associated software maintenance revenue recognized ratably over the contract term. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.In addition to our product offerings, we provide a broad range of service and support options for our customers, including technical support services and advanced services. Technical support services represent the majority of these offerings which are distinct performance obligations that are satisfied over time with revenue recognized ratably over the contract term. Advanced services are distinct performance obligations that are satisfied over time with revenue recognized as services are delivered. The sales arrangements as discussed above are typically made pursuant to customer purchase orders based on master purchase or partner agreements. Cash is received based on our standard payment terms which is typically 30 days. We provide financing arrangements to customers for all of our hardware, software and service offerings. Refer to Note 9 for additional information. For these arrangements, cash is typically received over time.(b)Contract BalancesAccounts ReceivableAccounts receivable, net was $6.6 billion as of July 30, 2022 compared to $5.8 billion as of July 31, 2021, as reported on the Consolidated Balance Sheets.The allowances for credit loss for our accounts receivable are summarized as follows (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | July 30, 2022 |  | July 31, 2021 |  | July 25, 2020 |
| Allowance for credit loss at beginning of fiscal year |  | $ | 109  |  |  | $ | 143  |  |  | $ | 136  |  |
| Provisions (benefits) |  | 64  |  |  | 21  |  |  | 55  |  |
| Recoveries (write-offs), net |  | (81) |  |  | (29) |  |  | (48) |  |
| Foreign exchange and other |  | (9) |  |  | (26) |  |  | —  |  |
| Allowance for credit loss at end of fiscal year |  | $ | 83  |  |  | $ | 109  |  |  | $ | 143  |  |

Contract Assets and LiabilitiesGross contract assets by our internal risk ratings are summarized as follows (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | July 30, 2022 |  | July 31, 2021 |
| 1 to 4 | $ | 414  |  |  | $ | 521  |  |
| 5 to 6 | 814  |  |  | 770  |  |
| 7 and Higher | 158  |  |  | 166  |  |
| Total | $ | 1,386  |  |  | $ | 1,457  |  |

Contract assets consist of unbilled receivables and are recorded when revenue is recognized in advance of scheduled billings to our customers. These amounts are primarily related to software and service arrangements where transfer of control has occurred but we have not yet invoiced. As of July 30, 2022 and July 31, 2021, our contract assets for these unbilled receivables, net of allowances, were $1.3 billion and $1.4 billion, respectively, and were included in other current assets and other assets.71
