Revenue from Contracts with Customers (Notes)

12 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Revenue from Contracts with Customers

Contract Assets and Contract Liabilities

The contract assets are subject to credit risk and reviewed in accordance with ASC 326. The Company monitors the credit quality of customer contract asset balances on an individual basis, at each reporting date, through credit characteristics, geographic location, and the industry in which they operate. The Company recognizes an impairment on contract assets if, subsequent to contract inception, it becomes probable payment is not collectible. An allowance for expected credit loss reflects losses expected over the remaining term of the contract asset and is determined based upon historical losses, customer-specific factors, and current economic conditions. The potential impact of credit losses on contract assets was immaterial as of June 30, 2022.

The Company's contract assets and contract liabilities were as follows as of June 30, 2022 and September 30, 2021:

	June 30, 2022		September 30, 2021
	(Dollars in Thousands)
Contract assets	$	857,065	$	61,494
Contract liabilities	(164,408)		(79,553)
	$	692,657	$	(18,059)

Contract assets and contract liabilities are presented net at the contract level for each reporting period.

The majority of the Company’s contract balances are related to arrangements where revenue is recognized at a point in time and payments are made according to a contractual billing schedule. The change in net contract liabilities during fiscal 2022 was primarily due to the Heritage AspenTech acquisition and customer billings which exceeded revenue recognized for

performance completed during the fiscal year. Revenue recognized during the fiscal year included $33.5 million that was included in the beginning contract liability balance.

Contract Costs

The Company pays commissions for new product sales and implementation services as well as for renewals of existing contracts. Commissions paid to obtain renewal contracts are not commensurate with the commissions paid for new product sales or implementation services, and therefore, a portion of the commissions paid for new contracts and implementation services relate to future renewals and are therefore deferred and amortized over an estimated period of benefit of 4 years to 8 years.

The Company accounts for new product sales commissions using a portfolio approach and allocate the cost of commissions in proportion to the allocation of transaction price of license and maintenance performance obligations, including assumed renewals. Commissions allocated to the license and license renewal components are expensed at the time the license revenue is recognized. Commissions allocated to maintenance are capitalized and amortized on a straight-line basis over a period of four years to eight years for new contracts, reflecting the Company's estimate of the expected period that they will benefit from those commissions.

Amortization of capitalized contract costs is included in selling and marketing expenses in the Company's statement of operations.

Transaction Price Allocated to Remaining Performance Obligations

The following table includes the aggregate amount of the transaction price allocated as of June 30, 2022 to the performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:

	Year Ended June 30,
	2023		2024		2025		2026		2027		Thereafter
	(Dollars in Thousands)
License and solutions	$	168,915	$	76,425	$	41,231	$	13,283	$	736	$	—
Maintenance	260,548		175,818		122,777		80,441		50,948		10,113
Services and other	49,456		5,214		3,742		2,796		2,075		3,107