Revenue Recognition Contract Asset & Liability (Tables)

6 Months Ended

Jun. 30, 2018

Contract Asset and Liability [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]

Contract Assets and Liabilities. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. Total contract assets and contract liabilities as of June 30, 2018 are as follows:

(dollars in millions)	June 30, 2018
Contract assets, current	$	3,273
Contract assets, noncurrent (included within Other assets)	1,015
Total contract assets	4,288
Contract liabilities, current	(5,652		)
Contract liabilities, noncurrent (included within Other long-term liabilities)	(4,838		)
Total contract liabilities	(10,490		)
Net contract liabilities	$	(6,202	)

Under the New Revenue Standard, during the six months ended June 30, 2018, net contract liabilities increased to $6,202 million. This reflects the establishment of $6,365 million of net contract liabilities upon the adoption, and $14,401 million of advance payments from customers and reclassifications of contract assets to receivables upon billing during the period. These increases were partially offset by the liquidation of beginning of period contract liabilities of $1,728 million as a result of revenue recognition, and by $12,701 million of revenue recognition within the period. The remaining change is primarily attributable to the impact of foreign currency exchange rate changes on the balance of contract assets and liabilities.