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Contract Assets and Liabilities | 12 Months Ended
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Dec. 31, 2024
Revenue from Contract with Customer [Abstract] |
Contract Assets and Liabilities | NOTE 6: CONTRACT ASSETS AND LIABILITIES Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billings. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. Total contract assets and contract liabilities as of December 31, 2024 and 2023 were as follows:
(dollars in millions) | 2024 |  | 2023
Contract assets | $ | 14,570 |  |  | $ | 12,139 |
Contract liabilities | (18,616) |  |  | (17,183) |
Net contract liabilities | $ | (4,046) |  |  | $ | (5,044) |
Contract assets increased $2.4 billion during 2024 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney and Raytheon, partially offset by an increase in the allowance for expected credit losses due to a customer bankruptcy recorded at Pratt & Whitney in the fourth quarter of 2024. Contract liabilities increased $1.4 billion during 2024 primarily due to billings in excess of sales on certain contracts at Raytheon. In 2024, 2023, and 2022, we recognized revenue of $7.2 billion, $5.3 billion, and $4.8 billion related to our Contract liabilities at January 1, 2024, January 1, 2023, and January 1, 2022, respectively. Contract assets consisted of the following at December 31:
(dollars in millions) | 2024 |  | 2023
Revenue recognized in advance of customer billings | $ | 30,226 |  |  | $ | 26,481 |
Progress payments | (15,656) |  |  | (14,342) |
Total contract assets | $ | 14,570 |  |  | $ | 12,139 |
For U.S. government contracts that provide progress payments, the U.S. government has title to the asset related to unbilled amounts. Contract assets are net of an allowance for expected credit losses of $491 million, $197 million, and $318 million as of December 31, 2024, 2023, and 2022, respectively. The increase in allowance for expected credit losses in 2024 compared to 2023 was primarily related to an increase in reserves as a result of a customer bankruptcy recorded at Pratt & Whitney in the fourth quarter of 2024. The allowance for expected credit losses activity was not significant in 2023 or 2022.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org/606/tableOfContent + Details
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