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Revenue from Contracts with Customers
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers Revenue from Contracts with Customers
Disaggregation of Revenue
The following table summarizes the disaggregation of our revenue by segment, geography, major product and service type and customer type for the years ended December 31, 2023, 2022 and 2021, consistent with the information reviewed by our chief operating decision maker for evaluating the financial performance of reportable segments:
Years Ended
202320222021
(in millions)Products and Systems IntegrationSoftware and ServicesTotalProducts and Systems IntegrationSoftware and ServicesTotalProducts and Systems IntegrationSoftware and ServicesTotal
Regions
North America$4,507 $2,425 $6,932 $4,286 $2,088 $6,374 $3,723 $1,838 $5,561 
International1,735 1,311 3,046 1,442 1,296 2,738 1,310 1,300 2,610 
$6,242 $3,736 $9,978 $5,728 $3,384 $9,112 $5,033 $3,138 $8,171 
Major Products and Services
LMR Communications$5,127 $2,399 $7,526 $4,713 $2,274 $6,987 $4,203 $2,205 $6,408 
Video1,115 611 1,726 1,015 508 1,523 830 396 1,226 
Command Center— 726 726 — 602 602 — 537 537 
$6,242 $3,736 $9,978 $5,728 $3,384 $9,112 $5,033 $3,138 $8,171 
Customer Type
Direct$3,619 $3,396 $7,015 $3,368 $3,057 $6,425 $3,147 $2,842 $5,989 
Indirect2,623 340 2,963 2,360 327 2,687 1,886 296 2,182 
$6,242 $3,736 $9,978 $5,728 $3,384 $9,112 $5,033 $3,138 $8,171 
Remaining Performance Obligations
Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of a period. The transaction value associated with remaining performance obligations which were not yet satisfied as of December 31, 2023 was $9.3 billion. A total of $5.0 billion was from Products and Systems Integration performance obligations that were not yet satisfied, of which $3.0 billion is expected to be recognized in the next twelve months. The remaining amounts will generally be satisfied over time as systems are implemented. Remaining performance obligations from the Products and Systems Integration segment are equal to disclosed backlog for the segment. A total of $4.3 billion was from Software and Services performance obligations that were not
yet satisfied as of December 31, 2023. The determination of Software and Services performance obligations that are not satisfied takes into account a contract term that may be limited by the customer’s ability to terminate for convenience. Where termination for convenience exists in the Company's services contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal. As a result, remaining performance obligations from the Software and Services segment may be less than disclosed backlog in the Software and Services segment due to multi-year service contracts with termination for convenience clauses. The Company expects to recognize $1.7 billion from unsatisfied Software and Services performance obligations over the next twelve months, with the remaining performance obligations to be recognized over time as services are performed and software is implemented.
In October 2021, the U.K.'s Competition and Markets Authority ("CMA") announced that it had opened a market investigation into the Mobile Radio Network Services market. This investigation included Airwave, the Company's private mobile radio communications network that the Company acquired in 2016. On July 31, 2023, the CMA adopted a remedies order which implemented the price control set out in its final decision, which was suspended until the CAT dismissed the Company's appeal on December 22, 2023. Based on the adoption of the remedies order, since August 1, 2023, revenue under the Airwave contract has been recognized in accordance with the prospective price control as the contract value was subject to variable consideration constraints. The remaining performance obligations for Airwave services contracted with the Home Office through 2026, inclusive of the five month period beginning August 1, 2023, was reduced by $777 million to align with the remedies order as of December 31, 2023.
Payment terms on system contracts are typically tied to implementation milestones associated with progress on contracts, while revenue recognition is over time based on a cost-to-cost method of measuring performance. The Company may recognize a Contract asset or Contract liability, depending on whether revenue has been recognized in excess of billings or billings in excess of revenue. Services contracts are typically billed in advance, generating Contract liabilities until the Company has performed the services. The Company does not record a financing component to contracts when it expects, at contract inception, that the period between the transfer of a promised good or service and related payment terms are less than a year.
Contract Balances
December 31 (in millions)202320222021
Accounts receivable, net$1,710 $1,518 $1,386 
Contract assets1,102 974 1,105 
Contract liabilities2,037 1,859 1,650 
Non-current contract liabilities424 363 306 
Revenue recognized during the year ended December 31, 2023 which was previously included in Contract liabilities as of January 1, 2023 was $1.3 billion, compared to $1.1 billion of revenue recognized during the year ended December 31, 2022 which was previously included in Contract liabilities as of January 1, 2022, and $1.0 billion of revenue recognized during the year ended December 31, 2021 which was previously included in Contract liabilities as of January 1, 2021. Revenue of $37 million was reversed during the year ended December 31, 2023 related to performance obligations satisfied, or partially satisfied, in previous periods, primarily driven by changes in the estimates of progress on system contracts, compared to $26 million during the year ended December 31, 2022 and $4 million during the year ended December 31, 2021.
There have been no material expected credit losses recognized on contract assets during the year ended December 31, 2023.
Contract Cost Balances
December 31 (in millions)202320222021
Current contract cost assets$56 $61 $30 
Non-current contract cost assets119 130 124 
Contract cost assets include incremental costs to obtain a contract, primarily related to the Company's sales incentive plans, and certain costs to fulfill contracts. Contract cost assets are amortized into expense over a period that follows the passage of control to the customer over time. Incremental costs to obtain a contract with the Company's sales incentive plans are accounted for under a portfolio approach, with amortization ranging from one year to eight years to approximate the recognition of revenues over time. Where incremental costs to obtain a contract will be recognized in one year or less, the Company applies a practical expedient around expensing amounts as incurred. Amortization of contract cost assets was $61 million for the year ended December 31, 2023, compared to $62 million as of the year ended December 31, 2022 and $52 million as of the year ended December 31, 2021.