Table of Contents APPLIED MATERIALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Note 8 Balance Sheet Detail Contract balances at the end of each reporting period were as follows: The increase in contract assets during fiscal 2020, was primarily due to goods transferred to customers where payment was conditional upon technical sign off, offset by the reclassification of contract assets to net accounts receivable upon meeting conditions to the right to payment. During fiscal 2020, Applied recognized revenue of approximately $1.1 billion related to contract liabilities at October 27, 2019. This reduction in contract liabilities was offset by new billings for products and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized as of October 25, 2020. There were no impairment losses recognized on Applied’s accounts receivables and contract assets during fiscal 2020 and 2019. As of October 25, 2020, the amount of remaining unsatisfied performance obligations on contracts with an original estimated duration of one year or more was approximately $1.1 billion, of which approximately 70% is expected to be recognized within 12 months and the remainder is expected to be recognized within the following 24 months thereafter. Applied has elected the available practical expedient to exclude the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Included in finished goods inventory is $16 million at October 25, 2020 and $13 million at October 27, 2019, of newly-introduced systems at customer locations where the sales transaction did not meet Applied’s revenue recognition criteria as set forth in Note 1. Finished goods inventory includes $416 million and $318 million of evaluation inventory at October 25, 2020 and October 27, 2019, respectively. 83 October 25, 2020 October 27, 2019 (In millions) Other Current Assets Prepaid income taxes and income taxes receivable $ 162  $ 96  Prepaid expenses and other 602  485  $ 764  $ 581  October 25, 2020 October 27, 2019 (In millions) Inventories Customer service spares $ 1,270  $ 1,245  Raw materials 870  802  Work-in-process 624  575  Finished goods 1,140  852  $ 3,904  $ 3,474  October 25, 2020 October 27, 2019 (In millions) Contract assets $ 148  $ 108  Contract liabilities $ 1,321  $ 1,336 