Significant Accounting Policies (Tables)

6 Months Ended

Apr. 30, 2019

Accounting Policies [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The following table summarizes the impact of adopting ASC 606 on Ciena’s Condensed Consolidated Statements of Operations (in millions):

	Quarter Ended April 30, 2019
	As Reported		Adjustments			Balances without adoption of ASC 606
Total revenue	$	865,011	$	(14,219	)	$	850,792
Total cost of goods sold	$	490,334	$	(13,436	)	$	476,898
Net income	$	52,738	$	(467	)	$	52,271
Diluted net income per potential common share	$	0.33	$	—		$	0.33

	Six Months Ended April 30, 2019
	As Reported		Adjustments			Balances without adoption of ASC 606
Total revenue	$	1,643,538	$	(25,119	)	$	1,618,419
Total cost of goods sold	$	945,520	$	(22,565	)	$	922,955
Net income	$	86,354	$	(862	)	$	85,492
Diluted net income per potential common share	$	0.55	$	(0.01	)	$	0.54

The following table summarizes the cumulative effect of the changes made to Ciena’s Condensed Consolidated Balance Sheets in connection with the adoption of ASC 606 (in millions):

	Balance at October 31, 2018			New Revenue Recognition Standard				Adjusted Balance at November 1, 2018
ASSETS:
Accounts receivable, net	$	786,502		$	12,509		(1)	$	799,011
Inventories	$	262,751		(2,486		)	(2)	$	260,265
Prepaid expenses and other	$	198,945		21,470			(3)	$	220,415
Deferred tax asset, net	$	745,039		(14,439		)	(4)	$	730,600
Other long-term assets	$	71,652		3,998			(5)	$	75,650
Total assets	$	3,756,523		$	21,052			$	3,777,575
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Deferred revenue	$	111,134		$	(14,403	)	(6)	$	96,731
Long-term deferred revenue	$	58,323		(14,350		)	(7)	$	43,973
Accumulated deficit	$	(4,947,652	)	49,805			(8)	$	(4,897,847	)
Total liabilities and stockholders equity	$	3,756,523		$	21,052			$	3,777,575

(1) Unpaid accounts receivable and related deferred revenue related to rights and obligations in a contract are interdependent and therefore recorded net within Ciena’s balance sheet. This represents an increase of $12.5 million from the reversal of certain net unpaid accounts receivable and related deferred revenue.

(2) Represents a decrease of $2.5 million in deferred costs of goods sold due to change in revenue recognition for certain product sales.

(3) Represents increases of $27.5 million in unbilled accounts receivable for change in recognizing revenue for installation services, $3.9 million in unbilled accounts receivable from change in recognizing revenue for certain product sales and $9.6 million related to short-term capitalized acquisition costs (e.g., commissions) and a decrease of $19.5 million related to prepaid cost of installation services.

(4) Represents a decrease of $14.4 million in deferred tax asset, net, related to the unrecognized income tax effects of the net adjustments from the new revenue recognition standard.

(5) Represents an increase of $4.0 million related to long-term capitalized acquisition costs (e.g., commissions).

(6) Represents decreases of $23.6 million in deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and $1.7 million in deferred revenue, primarily due to a change in revenue recognition for certain product sales, and increases of $2.7 million for a change in revenue recognition from certain maintenance services and $8.2 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and deferred revenue.

(7) Represents a decrease of $18.6 million in long-term deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and an increase of $4.3 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and long-term deferred revenue.

(8) Accumulated deficit impact from the adjustments noted above.