Revenue Recognition

9 Months Ended

Sep. 30, 2022

Revenue Recognition [Abstract]

Revenue Recognition

Note 3. Revenue Recognition

Revenue is measured based on the consideration specified in a contract with a customer.  The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product or service to a customer, which generally occurs over time. Substantially all of the Company’s customer contracts are non-cancelable and non-refundable.

Revenue is primarily generated from television, radio, digital and mobile audience measurement services and analytics, which are used by the Company’s clients to establish the value of airtime and more effectively schedule and promote their programming and the Company’s advertising clients to plan and optimize their spending. As the customer simultaneously receives and consumes the benefits provided by the Company’s performance, revenues for these services are recognized over the period during which the performance obligations are satisfied and control of the service is transferred to the customer.

The Company enters into cooperation arrangements with certain customers, under which the customer provides Nielsen with its data in exchange for Nielsen’s services. Nielsen records these transactions at fair value, which is determined based on the fair value of goods or services received, if reasonably estimable. If not reasonably estimable, the Company considers the fair value of the goods or services surrendered.

The table below sets forth the Company’s revenue disaggregated by major product offerings and timing of revenue recognition for the three and nine months ended September 30, 2022 and 2021.

(IN MILLIONS)  (UNAUDITED)	Three Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
Measurement	$	652	$	637	$		1,941	$	1,898
Impact/Content		236		245			706		708
Total	$	888	$	882	$		2,647	$	2,606
Timing of revenue recognition
Products and services transferred over time	$	784	$	787	$		2,337	$	2,326
Products transferred at a point in time		104		95			310		280
Total	$	888	$	882	$		2,647	$	2,606

Contract Assets and Liabilities

Contract assets represent the Company’s rights to consideration in exchange for services transferred to a customer that have not been billed as of the reporting date. While the Company’s rights to consideration are generally unconditional at the time its performance obligations are satisfied, under certain circumstances the related billing occurs in arrears, generally within one month of the services being rendered.

At the inception of a contract, the Company generally expects the period between when it transfers its services to its customers and when the customer pays for such services will be one year or less.

Contract liabilities relate to advance consideration received or the right to consideration that is unconditional from customers for which revenue is recognized when the performance obligation is satisfied and control transferred to the customer.

The table below sets forth the Company’s contract assets and contract liabilities from contracts with customers.

(IN MILLIONS)
Contract assets
Balance December 31, 2021	$	97
Revenue recognized that was not billed for the period		82
Contract assets included in December 31, 2021 balance that were invoiced and transferred to trade receivables for the period		(83	)
The effect of foreign currency translation and other		(3	)
Balance September 30, 2022	$	93
Contract liabilities
Balance December 31, 2021	$	131
Advance consideration received or the right to consideration that is unconditional from customers for which revenue was not recognized for the period		129
Revenue recognized for the period that was included in the contract liability balance as of December 31, 2021		(121	)
The effect of foreign currency translation and other		(5	)
Balance September 30, 2022	$	134

Transaction Price Allocated to the Remaining Performance Obligations

As of September 30, 2022, approximately $3.4 billion of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied) for our services. This amount excludes variable consideration allocated to performance obligations related to sales and usage based royalties on licenses of intellectual property.

The Company expects to recognize revenue on approximately 66% of these remaining performance obligations through December 31, 2023, with the balance recognized thereafter.

Deferred Costs

Incremental direct costs incurred to build the infrastructure to service new contracts are capitalized as a contract cost. As of September 30, 2022 and December 31, 2021, the balances of such capitalized costs were $53 million and $31 million, respectively. These costs are typically amortized through cost of revenues over the original contract period beginning when the infrastructure to service new clients is ready for its intended use. We amortized $0.3 million and $1 million of these costs for the three and nine months ended September 30, 2022, respectively.  For the three and nine months ended September 30, 2021, there was no amortization recorded given that the Company had not yet begun to transfer the goods and services associated with these capitalized costs. There was no impairment loss recorded in any of the periods presented. Incremental direct costs incurred to build the infrastructure to service new contracts are capitalized as a contract cost.

Expected Credit Losses

Nielsen is required to measure expected credit losses on trade accounts receivable. Nielsen considered the asset’s contractual life, the risk of loss and reasonable and supportable forecasts of future economic conditions. The estimate of expected credit losses reflects the risk of loss, even if management believes no loss was incurred as of the measurement date.

The following schedule represents the allowance for doubtful accounts roll forward incorporating expected credit losses as of September 30, 2022 and December 31, 2021, respectively.

(IN MILLIONS)	Balance Beginning of Period		Charges to Expense			Deductions			Effect of Foreign Currency Translation		Balance at End of Period
Allowance for doubtful accounts
Nine months ended September 30, 2022	$	6	$	-		$	-	$	(1	)	$	5
Year ended December 31, 2021	$	11	$	(4	)	$	-	$	(1	)	$	6