Revenue Recognition

3 Months Ended

Sep. 30, 2022

Revenue Disclosure [Abstract]

Revenue Recognition

Revenue Recognition

The Company recognizes revenue when control of the promised goods or services is transferred to the customer and in amounts that the Company expects to collect. The timing of revenue recognition takes into consideration the various shipping terms applicable to the Company’s sales. For most transactions, control passes in accordance with agreed upon delivery terms. 

The Company delivers products to company-owned stores, home centers and other regional or national consumer retail outlets, paint dealers, concessionaires and independent distributors, company-owned distribution networks, and directly to manufacturing companies and retail customers. Each product delivered to a third-party customer is considered to satisfy a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. The Company is entitled to collection of the sales price under normal credit terms in the regions in which it operates. Accounts receivable are recognized when there is an unconditional right to consideration. Payment terms vary from customer to customer, depending on creditworthiness, prior payment history and other considerations.

The Company also provides services by applying coatings to customers' manufactured parts and assembled products and by providing technical support to certain customers. Performance obligations are satisfied over time as critical milestones are met and as services are provided. PPG is entitled to payment as the services are rendered. For the three and nine months ended September 30, 2023 and 2022, service revenue constituted less than 5% of total revenue.

Net sales by segment and region for the three and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30		Nine Months Ended September 30
($ in millions)	2023	2022	2023	2022
Performance Coatings
United States and Canada	$1,287	$1,268	$3,807	$3,660
Europe, Middle East and Africa ("EMEA")	932	841	2,822	2,784
Asia Pacific	274	281	821	842
Latin America	387	315	1,099	918
Total	$2,880	$2,705	$8,549	$8,204
Industrial Coatings
United States and Canada	$654	$686	$1,969	$2,024
EMEA	461	445	1,519	1,452
Asia Pacific	459	453	1,295	1,278
Latin America	190	179	564	509
Total	$1,764	$1,763	$5,347	$5,263
Total Net Sales
United States and Canada	$1,941	$1,954	$5,776	$5,684
EMEA	1,393	1,286	4,341	4,236
Asia Pacific	733	734	2,116	2,120
Latin America	577	494	1,663	1,427
Total PPG	$4,644	$4,468	$13,896	$13,467

Allowance for Doubtful Accounts

All trade receivables are reported on the condensed consolidated balance sheet at the outstanding principal amount adjusted for any allowance for doubtful accounts and any charge-offs. PPG provides an allowance for doubtful accounts to reduce trade receivables to their estimated net realizable value equal to the amount that is expected to be collected. This allowance is estimated based on historical collection experience, current regional economic and market conditions, the aging of accounts receivable, assessments of current creditworthiness of customers and forward-looking information. The use of forward-looking information is based on certain macroeconomic and microeconomic indicators including, but not limited to, regional business environment risk, political risk, and commercial and financing risks.

PPG reviews its allowance for doubtful accounts on a quarterly basis to ensure the estimate reflects regional risk trends as well as current and future global operating conditions.

The following table summarizes allowance for doubtful accounts activity for the nine months ended September 30, 2023 and 2022:

	Trade Receivables Allowance for Doubtful Accounts
($ in millions)	2023	2022
January 1	$31	$31
Bad debt expense	10	46
Recoveries of previously reserved trade receivables	(15)	(46)
Other	(3)	4
September 30	$23	$35

In the first quarter 2022, PPG recorded a bad debt reserve of $43 million associated with the adverse economic impacts of the Russian invasion of Ukraine. During the second quarter 2022, the Company released a portion of this previously established reserve due to the collection of certain trade receivables. Refer to Note 7, "Impairment and Other Related Charges, Net" for additional information.