Revenue (Tables)

12 Months Ended

Dec. 31, 2018

Revenue

Schedule of disaggregation of revenue

Revenue by Major Products/Service Offerings

($ in millions)

					Technology
			Global		Services
	Cognitive		Business		& Cloud				Global				Total
For the year ended December 31, 2018:	Solutions		Services		Platforms		Systems		Financing		Other		Revenue
Solutions Software	$	12,903	$	—	$	—	$	—	$	—	$	—	$	12,903
Transaction Processing Software	5,578		—		—		—		—		—		5,578
Consulting	—		7,705		—		—		—		—		7,705
Global Process Services	—		1,259		—		—		—		—		1,259
Application Management	—		7,852		—		—		—		—		7,852
Infrastructure Services	—		—		23,007		—		—		—		23,007
Technical Support Services	—		—		6,961		—		—		—		6,961
Integration Software	—		—		4,493		—		—		—		4,493
Systems Hardware	—		—		—		6,363		—		—		6,363
Operating Systems Software	—		—		—		1,671		—		—		1,671
Global Financing*	—		—		—		—		1,590		—		1,590
Other Revenue	—		—		—		—		—		207		207
Total	$	18,481	$	16,817	$	34,462	$	8,034	$	1,590	$	207	$	79,591

*Contains lease and loan/working capital financing arrangements which are not subject to the guidance on revenue from contracts with customers.

Revenue by Geography

($ in millions)

	Total
For the year ended December 31, 2018:	Revenue
Americas	$	36,994
Europe/Middle East/Africa	25,491
Asia Pacific	17,106
Total	$	79,591

Schedule of reconciliation of contract balances

($ in millions)

	At December 31,		At January 1,
	2018		2018 (2)
Notes and accounts receivable-trade (net of allowances of $309 and $297 at December 31, 2018 and January 1, 2018, respectively)	$	7,432	$	8,295
Contract assets (1)	470		557
Deferred income (current)	11,165		11,493
Deferred income (noncurrent)	3,445		3,758

(1)Included within prepaid expenses and other current assets in the Consolidated Statement of Financial Position.

(2)As adjusted, upon adoption of the revenue standard on January 1, 2018.

Schedule of deferred contract costs

($ in millions)

	At December 31,
	2018
Capitalized costs to obtain a contract	$	717
Deferred costs to fulfill a contract:
Deferred setup costs	2,085
Other deferred fulfillment costs	2,173
Total deferred costs (1)	$	4,975

(1) Of the total, $2,300 million is current and $2,676 million is noncurrent. Prior to January 1, 2018, the current and noncurrent balance of deferred costs were included within prepaid expenses and other current assets and investments and sundry assets, respectively.

Accounting Standards Update 2014-09, Revenue from Contracts with Customers

Revenue

Schedule of transition disclosures

Consolidated Statement of Earnings Impacts

($ in millions except per share amounts)

	As Reported					Adjusted
	under New		Adjustments			Amounts
	Revenue		to Convert			under Prior
For the year ended December 31, 2018:	Standard		to Prior GAAP			GAAP
Revenue	$	79,591	$	(63	)	$	79,528
Cost	42,655		(40		)	42,615
Gross profit	36,936		(23		)	36,912
Selling, general and administrative expense	19,366		7			19,373
Income from continuing operations before income taxes	11,342		(30		)	11,312
Provision for/(benefit from) income taxes	2,619		(6		)	2,613
Net income	$	8,728	$	(24	)	$	8,704
Earnings/(loss) per share of common stock—continuing operations:
Assuming dilution	$	9.51	$	(0.03	)	$	9.49
Basic	$	9.56	$	(0.03	)	$	9.54

Consolidated Statement of Financial Position Impacts

($ in millions)

	As Reported						Adjusted
	under New			Adjustments			Amounts
	Revenue			to Convert			under Prior
At December 31, 2018:	Standard			to Prior GAAP			GAAP
Assets:
Notes and accounts receivable-trade (net of allowances)	$	7,432		$	533		$	7,965
Deferred costs (current)	2,300			(273		)	2,027
Prepaid expenses and other current assets	2,378			(430		)	1,948
Deferred taxes	5,216			190			5,406
Deferred costs (noncurrent)	2,676			(444		)	2,231
Investments and sundry assets	2,386			—			2,386
Total assets	$	123,382		$	(425	)	$	122,957
Liabilities:
Taxes	$	3,046		$	56		$	3,102
Deferred income (current)	11,165			67			11,232
Deferred income (noncurrent)	3,445			31			3,476
Total liabilities	$	106,452		$	154		$	106,606
Equity:
Retained earnings	$	159,206		$	(604	)	$	158,601
Accumulated other comprehensive income/(loss)	(29,490		)		26			(29,464	)
Total stockholders’ equity	$	16,929		$	(578	)	$	16,351
Total liabilities and stockholders’ equity	$	123,382		$	(425	)	$	122,957

Consolidated Statement of Cash Flows Impacts

($ in millions)

	As Reported					Adjusted
	under New		Adjustments			Amounts
	Revenue		to Convert			under Prior
For the year ended December 31, 2018:	Standard		to Prior GAAP			GAAP
Cash flows from operating activities:
Net income	$	8,728	$	(24	)	$	8,704
Adjustments to reconcile net income to cash provided by operating activities:
Changes in operating assets and liabilities, net of acquisitions/divestitures	554		24			578
Net cash provided by operating activities	$	15,247	$	—		$	15,247