XML 52 R11.htm IDEA: XBRL DOCUMENT v3.23.3
Revenue Recognition
 9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition:
Disaggregation of Revenue
The following tables provide details of revenue by major products/service offerings and revenue by geography.
Revenue by Major Products/Service Offerings
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2023202220232022
Hybrid Platform & Solutions$4,506 $4,172 $13,350 $12,641 
Transaction Processing1,759 1,640 5,444 5,107 
Total Software$6,265 $5,811 $18,794 $17,749 
Business Transformation2,291 2,165 6,869 6,646 
Application Operations1,710 1,593 5,204 4,865 
Technology Consulting961 943 2,865 2,826 
Total Consulting$4,963 $4,700 $14,938 $14,337 
Hybrid Infrastructure1,943 1,931 5,912 6,392 
Infrastructure Support1,329 1,421 4,076 4,413 
Total Infrastructure$3,272 $3,352 $9,988 $10,805 
Financing*186 174 566 474 
Other67 70 192 475 
Total revenue$14,752 $14,107 $44,479 $43,840 
*Contains lease and loan financing arrangements which are not subject to the guidance on revenue from contracts with customers.
Revenue by Geography
 Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions)20232022 20232022
Americas$7,686 $7,416 $22,810 $22,614 
Europe/Middle East/Africa4,223 3,959 13,156 12,716 
Asia Pacific2,843 2,732 8,513 8,509 
Total$14,752 $14,107 $44,479 $43,840 
Remaining Performance Obligations
The remaining performance obligation (RPO) disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed, such as certain as-a-Service, governmental, term software license and services offerings. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Additionally, as a practical expedient, the company does not include contracts that have an original duration of one year or less. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.
At September 30, 2023, the aggregate amount of the transaction price allocated to RPO related to customer contracts that are unsatisfied or partially unsatisfied was $55 billion. Approximately 71 percent of the amount is expected to be recognized as revenue in the subsequent two years, approximately 26 percent in the subsequent three to five years and the balance thereafter.
Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods
For the three months ended September 30, 2023 the revenue recognized for performance obligations satisfied (or partially satisfied) in previous periods was immaterial. For the nine months ended September 30, 2023, revenue was reduced by $16 million mainly due to changes in estimates on contracts with cost-to-cost measures of progress.
Reconciliation of Contract Balances
The following table provides information about notes and accounts receivable–trade, contract assets and deferred income balances.
(Dollars in millions)At September 30, 2023At December 31, 2022
Notes and accounts receivable — trade (net of allowances of $198 in 2023 and $233 in 2022)
$5,330 $6,541 
Contract assets*$454 $464 
Deferred income (current)$11,917 $12,032 
Deferred income (noncurrent)$3,085 $3,499 
*Included within prepaid expenses and other current assets in the Consolidated Balance Sheet.
The amount of revenue recognized during the three and nine months ended September 30, 2023 that was included within the deferred income balance at June 30, 2023 and December 31, 2022 was $4.3 billion and $9.0 billion, respectively, and was primarily related to services and software.
The following table provides roll forwards of the notes and accounts receivable–trade allowance for expected credit losses for the nine months ended September 30, 2023 and the year ended December 31, 2022.
(Dollars in millions)    
January 1, 2023Additions / (Releases)Write-offs Foreign currency and otherSeptember 30, 2023
$233 $28 $(67)$4 $198 
January 1, 2022Additions / (Releases)Write-offs Foreign currency and otherDecember 31, 2022
$218 $59 $(31)$(14)$233 
The contract assets allowance for expected credit losses was not material in any of the periods presented.