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Contracts with Customers
 6 Months Ended
Jun. 30, 2020
Revenue From Contract With Customer [Abstract]  
Contracts with Customers

4.  Contracts with Customers

Contract Assets and Liabilities/Contract Balances

Information about unbilled receivables, contract assets and contract liabilities from contracts with customers is as follows (in millions):

 

 

 

June 30,

2020

 

 

December 31,

2019

 

Unbilled receivables

 

$

736.7

 

 

$

556.4

 

Deferred contract costs

 

 

70.1

 

 

 

98.3

 

Deferred revenue

 

 

519.6

 

 

 

503.8

 

 

The unbilled receivables, which are included in premiums and fees receivable in our consolidated balance sheet, primarily relate to our rights to consideration for work completed but not billed at the reporting date.  These are transferred to the receivables when the client is billed.  The deferred contract costs represent the costs we incur to fulfill a new or renewal contract with our clients prior to the effective date of the contract.  These costs are expensed on the contract effective date.  The deferred revenue represents the remaining performance obligations under our contracts.

Significant changes in the deferred revenue balances, which include foreign currency translation adjustments, during the period are as follows (in millions):

 

 

 

 

 

 

 

Risk

 

 

 

 

 

 

 

Brokerage

 

 

Management

 

 

Total

 

Deferred revenue at December 31, 2019

 

$

337.2

 

 

$

166.6

 

 

$

503.8

 

Incremental deferred revenue

 

 

230.4

 

 

 

77.4

 

 

 

307.8

 

Revenue recognized during the six-month period ended June 30, 2020

    included in deferred revenue at December 31, 2019

 

 

(214.2

)

 

 

(75.6

)

 

 

(289.8

)

Impact of change in foreign exchange rates

 

 

(6.2

)

 

 

—

 

 

 

(6.2

)

Deferred revenue recognized from business acquisitions

 

 

4.0

 

 

 

—

 

 

 

4.0

 

Deferred revenue at June 30, 2020

 

$

351.2

 

 

$

168.4

 

 

$

519.6

 

 

Revenue recognized during the six-month period ended June 30, 2020 in the table above included revenue from 2019 acquisitions that would not be reflected in prior periods.

Remaining Performance Obligations

Remaining performance obligations represent the portion of the contract price for which work has not been performed.  As of June 30, 2020, the aggregate amount of the contract price allocated to remaining performance obligations was $519.6 million.  The estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period is as follows (in millions):

 

 

 

Brokerage

 

 

Risk

Management

 

 

Total

 

2020 (remaining six months)

 

$

263.4

 

 

$

78.7

 

 

$

342.1

 

2021

 

 

79.1

 

 

 

41.2

 

 

 

120.3

 

2022

 

 

6.7

 

 

 

23.1

 

 

 

29.8

 

2023

 

 

1.0

 

 

 

10.5

 

 

 

11.5

 

2024

 

 

0.5

 

 

 

5.1

 

 

 

5.6

 

Thereafter

 

 

0.5

 

 

 

9.8

 

 

 

10.3

 

Total

 

$

351.2

 

 

$

168.4

 

 

$

519.6

 

 

Deferred Contract Costs

We capitalize costs incurred to fulfill contracts as deferred contract costs which are included in other current assets in our consolidated balance sheet.  Deferred contract costs were $70.1 million and $98.3 million as of June 30, 2020 and December 31, 2019, respectively.  Capitalized fulfillment costs are amortized on the contract effective date.  The amount of amortization of the deferred contract costs was $208.1 million and $191.9 million for the six-month periods ended June 30, 2020 and 2019, respectively.

We have applied the practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less for our brokerage segment.  These costs are included in compensation and operating expenses in our consolidated statement of earnings.