Revenue Recognition

3 Months Ended

Oct. 31, 2019

Revenue from Contract with Customer [Abstract]

We adopted ASC 606, effective August 1, 2018, using the modified retrospective method applied to those contracts which were not completed as of August 1, 2018. Due to the cumulative impact of adopting ASC 606, we recorded a net increase of $865 to opening retained earnings, net of tax, as of August 1, 2018. The impact is primarily related to the timing of revenue recognition for the shipment of products in both our Medical and Life Sciences segments where risk of loss provisions are present (“synthetic FOB destination”). The new standard does not require us to defer revenue for these products and allows us to recognize revenue at the time of shipment. The cumulative adjustment to retained earnings also includes the impact of the change in timing of revenue recognition associated with software licensing arrangements in our Medical segment. Additionally, revenue related to software renewals was historically recognized on a ratable basis over the license period. Under ASC 606, the license is considered functional intellectual property, and is considered to be transferred to the customer at a point in time, specifically, at the start of each annual renewal period. As a result, revenue related to our annual software license renewals has been accelerated.

The following table gives information as to the net sales disaggregated by geography and product line:



	Three Months Ended October 31,
Net sales by geography	2019		2018
United States	$	190,084	$	168,938
Europe/Africa/Middle East	41,018		32,014
Asia/Pacific	17,065		15,752
Canada	7,833		7,373
Latin America/South America	1,246		1,512
Total	$	257,246	$	225,589
Net sales by product line
Capital equipment	$	58,748	$	58,132
Consumables	153,279		136,821
Product service	31,568		29,829
Instrument sales	13,520		—
All other⁽¹⁾	131		807
Total	$	257,246	$	225,589

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(1)	Primarily includes software licensing revenues.

Remaining Performance Obligations

At October 31, 2019, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) was approximately $73,456, primarily within the Medical segment. We expect to recognize revenue on approximately 70% of these remaining performance obligations over the remainder of fiscal 2020 and fiscal 2021. These performance obligations primarily reflect the future product service revenues for multi-period service arrangements.

Contract Liabilities

Contract liabilities primarily relate to payments received from customers in advance of performance under the contract. Our contract liabilities arise primarily in the Medical and Life Sciences segments when payment is received upfront for various multi-period extended service arrangements. We expect to recognize substantially all of this revenue over the next twelve months.

A summary of contract liabilities activity follows:



	Three Months Ended October 31,
	2019			2018
Beginning balance	$	28,235		$	29,015
Revenue deferred in current year	2,007			14,524
Deferred revenue recognized	(2,982		)	(13,547		)
Foreign currency translation	104			(163		)
Ending balance	27,364			29,829
Contract liabilities included in Other long-term liabilities	(384		)	(549		)
Deferred revenue	$	26,980		$	29,280