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Revenue
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer REVENUE
Refer to Note 2. Significant Accounting Policies for a complete description of the Company’s revenue recognition accounting policy.
Nature of Goods and Services
The principal activity from which the Company generates its revenue is the manufacturing of production parts for OEM customers. Aptiv recognizes revenue for production parts at a point in time, rather than over time, as the performance obligation is satisfied when customers obtain control of the product upon title transfer and not as the product is manufactured or developed.
Although production parts are highly customized with no alternative use, Aptiv does not have an enforceable right to payment as customers have the right to cancel a product program without a notification period. The amount of revenue recognized is based on the purchase order price and adjusted for revenue allocated to variable consideration (i.e. estimated rebates and price discounts), as applicable. Customers typically pay for production parts based on customary business practices with payment terms averaging 60 days.
The Company also generates revenue from the sale of software licenses, post delivery support and maintenance and professional software services, primarily from Wind River, which the Company acquired in December 2022. Refer to Note 20. Acquisitions and Divestitures for further information on this acquisition. The Company generally recognizes revenue for software licenses and professional software services at a point in time upon delivery or when the services are provided. Revenue from post delivery support and maintenance for software contracts are recognized over time on a ratable basis over the contract term. Under certain of these arrangements, timing may differ between revenue recognition and billing.
Disaggregation of Revenue
Revenue generated from Aptiv’s operating segments is disaggregated by primary geographic market in the following tables for the years ended December 31, 2022, 2021 and 2020. Information concerning geographic market reflects the manufacturing location.
For the Year Ended December 31, 2022:Signal and Power SolutionsAdvanced Safety and User ExperienceEliminations and OtherTotal
(in millions)
Geographic Market
North America$5,026 $1,435 $(10)$6,451 
Europe, Middle East and Africa3,289 2,094 (11)5,372 
Asia Pacific4,236 1,058 (20)5,274 
South America392 — — 392 
Total net sales$12,943 $4,587 $(41)$17,489 
For the Year Ended December 31, 2021:Signal and Power SolutionsAdvanced Safety and User ExperienceEliminations and OtherTotal
(in millions)
Geographic Market
North America$4,135 $1,204 $(7)$5,332 
Europe, Middle East and Africa3,387 1,802 (10)5,179 
Asia Pacific3,798 1,050 (19)4,829 
South America278 — — 278 
Total net sales$11,598 $4,056 $(36)$15,618 
For the Year Ended December 31, 2020:Signal and Power SolutionsAdvanced Safety and User ExperienceEliminations and OtherTotal
(in millions)
Geographic Market
North America$3,527 $970 $(3)$4,494 
Europe, Middle East and Africa2,869 1,625 (11)4,483 
Asia Pacific2,935 978 (15)3,898 
South America191 — — 191 
Total net sales$9,522 $3,573 $(29)$13,066 
Contract Balances
As of December 31, 2022, the balance of contract liabilities, which solely consisted of deferred revenue, was $99 million (of which $90 million was recorded in other current liabilities and $9 million was recorded in other long-term liabilities). There were no contract liabilities recorded as of December 31, 2021.
Contract assets include amounts related to the Company’s contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced. As of December 31, 2022, the balance of contract assets was $67 million (of which $24 million was recorded in other current assets and $43 million was recorded in other long-term assets). There were no contract assets recorded as of December 31, 2021.
The increase in our contract liabilities and contract assets during the year ended December 31, 2022 is due to the acquisition of Wind River.
Remaining Performance Obligations
For production parts, customer contracts generally are represented by a combination of a current purchase order and a current production schedule issued by the customer. There are no contracts for production parts outstanding beyond one year.
Aptiv does not enter into fixed long-term supply agreements. As permitted, Aptiv does not disclose information about remaining performance obligations that have original expected durations of one year or less for production parts.
Customer contracts for sales of software and related services are generally represented by a sales contract or purchase order with contract durations typically ranging from one to three years. Remaining performance obligations include contract liabilities and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to the remaining performance obligation is based on the standalone selling price. The value of the transaction price allocated to remaining performance obligations under software and related service contracts as of December 31, 2022 was approximately $135 million. The Company expects to recognize approximately 67% of remaining performance obligations as revenue in the next twelve months, and the remainder thereafter.
Costs to Obtain a Contract
From time to time, Aptiv makes payments to customers in conjunction with ongoing business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments. However, certain other payments to customers, or upfront fees, meet the criteria to be considered a cost to obtain a contract as they are directly attributable to a contract, are incremental and management expects the fees to be recoverable. As of December 31, 2022 and 2021, Aptiv has recorded $78 million (of which $17 million was classified within other current assets and $61 million was classified within other long-term assets) and $92 million (of which $34 million was classified within other current assets and $58 million was classified within other long-term assets), respectively, related to these capitalized upfront fees.
Capitalized upfront fees are amortized to revenue based on the transfer of goods and services to the customer for which the upfront fees relate, which typically range from three to five years. There have been no impairment losses in relation to the costs capitalized. The amount of amortization to net sales was $28 million, $31 million and $18 million for the years ended December 31, 2022, 2021 and 2020, respectively.