XML 30 R12.htm IDEA: XBRL DOCUMENT v3.25.0.1
Contract Assets and Liabilities
 12 Months Ended
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)20242023
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)20242023
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.