Revenue

3 Months Ended

Mar. 31, 2020

Revenue [Abstract]

Revenue from Contract with Customer [Text Block]

11. REVENUE

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring promised goods or services. The Company generally recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. From time to time, we enter into pricing agreements with our customers that provide for price reductions, some of which are conditional upon achieving certain criteria. In these instances, revenue is recognized based on the agreed-upon price at the time of shipment.    

Nature of Goods

The majority of our revenue is recorded at a point in time as defined by ASC Topic 606, Revenue from Contacts with Customers (“ASC 606”) as the customers obtain control of the product upon title transfer and not as the product is manufactured or developed. For certain customers, based on specific terms and conditions pertaining to termination for convenience, Delphi Technologies concluded that it had an enforceable right to payment for performance completed to date and the products have no alternative use to the Company, which requires the recognition of revenue over time as defined by ASC 606. The impact on both revenue and operating income from recognizing revenue over time instead of point in time is not significant.

The amount of revenue recognized for these products is based on the purchase order price and adjusted for revenue allocated to variable consideration (i.e. estimated rebates and price discounts), as applicable. Our payment terms are based on customary business practices and vary by customer type and products offered. The term between invoicing and when payment is due is not significant.

Disaggregation of Revenue

In the following table, net sales to outside customers, based on the manufacturing location, is disaggregated by primary geographical market:

	Three Months Ended March 31,
	2020		2019
	(in millions)
North America	$	260	$	338
Europe	418		542
Asia Pacific	242		236
South America	25		35
Total	$	945	$	1,151

The Fuel Injection Systems, Powertrain Products and Electrification & Electronics segments primarily serve OEMs along with certain Tier 1 suppliers (one that supplies vehicle components directly to manufacturers) and the Aftermarket segment serves sales channels to independent aftermarket customers and original equipment service customers.

In the following table, net sales is disaggregated by customer and sales channels:

	Three Months Ended March 31,
	2020		2019
	(in millions)
Sales to OEMs and Tier 1 customers:
Fuel Injection Systems	$	358	$	419
Powertrain Products	241		302
Electronics & Electrification products	172		237
Total sales to OEMs and Tier 1 customers	771		958
Sales to independent aftermarket customers	121		141
Sales to original equipment service customers	53		52
Total sales to aftermarket customers	174		193
Total	$	945	$	1,151

Contract Balances

As discussed above, certain customers have contracts with specific terms and conditions which require recognition of revenue over time as defined by ASC 606. As of March 31, 2020 and December 31, 2019 the recognition of revenue over time resulted in approximately $2 million and $2 million of unbilled accounts receivable, respectively, which are included in accounts receivable, net. There were no other contract assets or liabilities as of March 31, 2020 and December 31, 2019 as defined by ASC 606.

Return Assets

The Aftermarket segment provides certain customers with a right of return. The Company recognizes an estimated return asset (and adjusts for cost of sales) for the right to recover the products returned by the customer. ASC 606 requires that return assets be presented separately from inventory. As of March 31, 2020 and December 31, 2019, the Company had return assets of $7 million and $7 million, respectively, included in other current assets.

Practical Expedients and Exemptions

For our Fuel Injection Systems, Powertrain Products and Electrification & Electronics segments, we define the contract with the customer as the combination of a current purchase order and a current production schedule issued by the customer. For our Aftermarket segment, we define the contract with the customer as the combination of a current purchase order and a master agreement with the customer. Although there are instances where the master agreements may extend beyond one year, there are generally no purchase orders with an expected duration beyond a year.

There are generally no performance obligations outstanding beyond a year. The Company generally does not enter into fixed long-term supply agreements. The Company applies the exemption in ASC 606 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

In addition, the Company applies the practical expedient in ASC 340 and immediately expenses contract acquisition costs when incurred, including sales commissions, because the amortization period would be one year or less.