Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

The following tables provide disaggregation of revenue from contracts with customers based on service offering for the three and nine months ended September 30, 2021 and 2020. It also shows the amount of revenue that is not subject to ASC 606, "Revenue from Contracts with Customers" ("ASC 606"), but is instead governed by other accounting standards:


	Three Months Ended September 30, 2021				Three Months Ended September 30, 2020
	Total Revenue		Adjustments for Non-ASC 606 Revenue (1)	Total Revenue from Contracts with Customers	Total Revenue	Adjustments for Non-ASC 606 Revenue (1)	Total Revenue from Contracts with Customers
	(Dollars in millions)
Compute and Application Services	$	287	(126)	161	274	(124)	150
IP and Data Services	890		—	890	878	—	878
Fiber Infrastructure Services	412		(56)	356	379	(55)	324
Voice and Other	345		(3)	342	387	(2)	385
Affiliate Services	56		(56)	—	53	(53)	—
Total revenue	$	1,990	(241)	1,749	1,971	(234)	1,737


	Nine Months Ended September 30, 2021				Nine Months Ended September 30, 2020
	Total Revenue		Adjustments for Non-ASC 606 Revenue (1)	Total Revenue from Contracts with Customers	Total Revenue	Adjustments for Non-ASC 606 Revenue (1)	Total Revenue from Contracts with Customers
	(Dollars in millions)
Compute and Application Services	$	850	(380)	470	814	(371)	443
IP and Data Services	2,659		—	2,659	2,639	—	2,639
Fiber Infrastructure Services	1,210		(164)	1,046	1,116	(157)	959
Voice and Other	1,078		(8)	1,070	1,213	(6)	1,207
Affiliate Services	167		(167)	—	153	(153)	—
Total revenue	$	5,964	(719)	5,245	5,935	(687)	5,248

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(1) Includes lease revenue which is not within the scope of ASC 606.

Contract with customer, asset and liability

The following table provides balances of customer receivables, contract assets and contract liabilities, net of amounts reclassified as held for sale as of September 30, 2021 and December 31, 2020:


	September 30, 2021		December 31, 2020
	(Dollars in millions)
Customer receivables (1) (2)	$	618	683
Contract assets (3)	32		38
Contract liabilities (4)	259		385

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(1)Reflects gross customer receivables of $657 million and $728 million, net of allowance for credit losses of $39 million and $45 million, at September 30, 2021 and December 31, 2020, respectively.

(2)As of September 30, 2021, amount excludes customer receivables reclassified as held for sale of $82 million.

(3)As of September 30, 2021, no amounts have been reclassified as held for sale.

(4)As of September 30, 2021, amount excludes contract liabilities reclassified as held for sale of $62 million.

Capitalized contract cost

The following tables provide changes in our contract acquisition costs and fulfillment costs:


	Three Months Ended September 30, 2021			Three Months Ended September 30, 2020
	Acquisition Costs		Fulfillment Costs	Acquisition Costs	Fulfillment Costs
	(Dollars in millions)
Beginning of period balance	$	75	124	77	122
Costs incurred	15		22	14	21
Amortization	(14)		(21)	(15)	(22)
Reclassified as held for sale (1)	—		(27)	—	—
End of period balance	$	76	98	76	121


	Nine Months Ended September 30, 2021			Nine Months Ended September 30, 2020
	Acquisition Costs		Fulfillment Costs	Acquisition Costs	Fulfillment Costs
	(Dollars in millions)
Beginning of period balance	$	78	122	79	121
Costs incurred	44		68	44	65
Amortization	(46)		(65)	(47)	(65)
Reclassified as held for sale (1)	—		(27)	—	—
End of period balance	$	76	98	76	121

(1)Represents the amounts reclassified as held for sale related to our planned divestiture. See Note 2—Planned Divestiture of the Latin American Business.