NOTE 14 — UNEARNED REVENUE
Unearned revenue comprises mainly unearned revenue from volume licensing programs, and payments for offerings for which we have been paid in advance and we earn the revenue when we provide the service or software or otherwise meet the revenue recognition criteria.
Volume Licensing Programs
Unearned revenue from volume licensing programs represents customer billings for multi-year licensing arrangements paid either at inception of the agreement or annually at the beginning of each coverage period and accounted for as subscriptions with revenue recognized ratably over the coverage period.
Other
Also included in unearned revenue are payments for post-delivery support and consulting services to be performed in the future; Xbox LIVE subscriptions and prepaid points; OEM minimum commitments; Microsoft Dynamics business solutions products; Skype prepaid credits and subscriptions; and other offerings for which we have been paid in advance and earn the revenue when we provide the service or software, or otherwise meet the revenue recognition criteria.
The components of unearned revenue were as follows:
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| June 30, | 2013 | 2012 | ||||||
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Volume licensing programs |
$ | 18,871 | $ | 16,717 | ||||
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Other (a) |
3,528 | 3,342 | ||||||
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Total |
$ | 22,399 | $ | 20,059 | ||||
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| (a) |
Other as of June 30, 2012 included $540 million of unearned revenue associated with sales of Windows 7 with an option to upgrade to Windows 8 Pro at a discounted price (the “Windows Upgrade Offer”). |
Unearned revenue by segment was as follows:
| (In millions) | ||||||||
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| June 30, | 2013 | 2012 | ||||||
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Windows Division |
$ | 2,086 | $ | 2,444 | ||||
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Server and Tools |
8,639 | 7,445 | ||||||
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Microsoft Business Division |
10,142 | 9,015 | ||||||
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Other segments |
1,532 | 1,155 | ||||||
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Total |
$ | 22,399 | $ | 20,059 | ||||
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