(in thousands)

June 27,

2020

September 30,

2019

Contract asset

18,642

21,038

Deferred revenue

404,682

396,632

As of June 27, 2020, $14.1 million of our contract assets are expected to be transferred to receivables within the next 12 months and therefore are included in other current assets. The remainder is included in other long-term assets and expected to be transferred within the next 24 months. Approximately $13.3 million of the September 30, 2019 contract asset balance was transferred to receivables during the nine months ended June 27, 2020 as a result of the right to payment becoming unconditional. The majority of the contract asset balance relates to two large professional services contracts with invoicing terms based on performance milestones. The net decrease in contract assets of $2.4 million includes an increase of approximately $10.9 million related to revenue recognized in the period, net of billings. There were no impairments of contract assets during the nine months ended June 27, 2020.

During the nine months ended June 27, 2020, we recognized $344.5 million of revenue that was included in deferred revenue as of September 30, 2019 and there were additional deferrals of $349.9 million during the nine months ended June 27, 2020, primarily related to new billings. In addition, deferred revenue increased by an immaterial amount as a result of the acquisition of Onshape. The balance of total short- and long-term receivables as of September 30, 2019 was $412.5 million, compared to total short- and long-term receivables as of June 27, 2020 of $405.1 million.

Our multi-year, non-cancellable on-premise subscription contracts provide customers with an annual right to exchange software within the subscription with other software. Although the exchange right is limited to software products within a similar product grouping, the exchange right is not limited to products with substantially similar features and functionality as those originally delivered. We determined that this right to exchange previously delivered software for different software represents variable consideration to be accounted for as a liability. We have identified a standard portfolio of contracts with common characteristics and applied the expected value method of determining variable consideration associated with this right. Additionally, where there are isolated situations that are outside of the standard portfolio of contracts due to contract size, longer contract duration, or other unique contractual terms, we use the most likely amount method to determine the amount of variable consideration. In both circumstances, the variable consideration included in the transaction price is constrained to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. As of June 27, 2020 and September 30, 2019, the total refund liability was $31.6 million and $22.9 million, respectively, primarily associated with the annual right to exchange on-premise subscription software.

We recognize an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. These deferred costs (primarily commissions) are amortized proportionately related to revenue over five years, which is generally longer than the term of the initial contract because of anticipated renewals as commissions for renewals are not commensurate with commissions related to our initial contracts. As of June 27, 2020 and September 30, 2019, deferred costs of $31.1 million and $27.7 million, respectively, were included in other current assets and $65.0 million and $64.8 million, respectively, were included in other assets (non-current).

Our contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. As of June 27, 2020, the amounts include additional performance obligations of $404.7 million recorded in deferred revenue and $592.6 million that are not yet recorded in the consolidated balance sheets. We expect to recognize approximately 90% of the total $997.3 million over the next 24 months, with the remaining amount thereafter. Certain of our multi-year subscription contracts with start dates on or after October 1, 2018 contain a limited annual cancellation right. For

such cancellable subscription contracts, we consider each annual period a discrete contract. Early in the fourth quarter of 2019, we discontinued offering the cancellation right for substantially all new contracts. Remaining performance obligations do not include the cancellable value for subscriptions which contain this clause.

(in thousands)	Three months ended				Nine months ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Total recurring revenue	$	310,621	$	244,192	$	931,852	$	734,815
Perpetual license		6,773		9,213		23,988		61,354
Professional services		34,327		42,081		111,594		124,457
Total revenue	$	351,721	$	295,486	$	1,067,434	$	920,626

For further disaggregation of revenue by geographic region and product group see Note 11. Segment and Geographic Information.