Deferred Revenue and Financing Receivables

Deferred Revenue

Deferred revenue primarily relates to software maintenance agreements billed to customers for which the services have not yet been provided. The liability associated with performing these services is included in deferred revenue and, if not yet paid, the related customer receivable is included in other current assets. Billed but uncollected maintenance-related amounts included in other current assets at June 30, 2012 and September 30, 2011 were $72.3 million and $93.0 million, respectively.

Financing Receivables

We periodically provide extended payment terms for software purchases to credit-worthy customers with payment terms up to 24 months. The determination of whether to offer such payment terms is based on the size, nature and credit-worthiness of the customer, and the history of collecting amounts due, without concession, from the customer and customers generally. This determination is based on an internal credit assessment. In making this assessment, we use the Standard & Poor's (S&P) credit rating as our primary credit quality indicator, if available. If a customer, including both commercial and U.S. Federal government, has a S&P bond rating of BBB- or above, we designate the customer as a Tier 1. If a customer does not have a S&P bond rating, or has a S&P bond rating below BBB-, we base our assessment on an internal credit assessment which considers selected balance sheet, operating and liquidity measures, historical payment experience, and current business conditions within the industry or region. We designate these customers as Tier 2 or Tier 3, with Tier 3 being lower credit quality than Tier 2.

As of June 30, 2012 and September 30, 2011, amounts due from customers for contracts with original payment terms greater than twelve months (financing receivables) totaled $39.1 million and $57.9 million, respectively. Accounts receivable in the accompanying consolidated balance sheets included current receivables from such contracts totaling $28.8 million and $41.9 million at June 30, 2012 and September 30, 2011, respectively, and other assets in the accompanying consolidated balance sheets included long-term receivables from such contracts totaling $10.3 million and $16.0 million at June 30, 2012 and September 30, 2011, respectively. As of June 30, 2012, $0.4 million of these receivables were past due (of which $0.4 million was greater than 90 days past due). None of these receivables were past due as of September 30, 2011. Our credit risk assessment for financing receivables was as follows:



	June 30, 2012		September 30, 2011
	(in thousands)
S&P bond rating BBB-1 and above-Tier 1	$	28,606	$	38,575
Internal Credit Assessment-Tier 2	8,933		17,568
Internal Credit Assessment-Tier 3	1,583		1,798
Total financing receivables	$	39,122	$	57,941

We evaluate the need for an allowance for doubtful accounts for estimated losses resulting from the inability of these customers to make required payments. As of June 30, 2012 and September 30, 2011, we concluded that all financing receivables were collectible and no reserve for credit losses was recorded. We did not provide a reserve for credit losses or write off any uncollectible financing receivables in the nine months ended June 30, 2012 and fiscal year 2011. We write off uncollectible trade and financing receivables when we have exhausted all collection avenues.

We periodically transfer future payments under certain of these contracts to third-party financial institutions on a non-recourse basis. We record such transfers as sales of the related accounts receivable when we surrender control of such receivables. We sold $0.6 million and $1.8 million of financing receivables to third-party financial institutions in the three and nine months ended June 30, 2012, respectively. We sold $4.0 million financing receivables to third-party financial institutions in the three and nine months ended July 2, 2011.