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Revenue Recognition | 3 Months Ended
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Mar. 31, 2021
Revenue from Contract with Customer [Abstract] |
Revenue Recognition | Revenue Recognition Product and Service Categories Beginning in the first quarter of 2021, we categorize our products and services revenue among the following four categories for the Business segment: •Compute and Application Services, which include our Edge Cloud services, IT solutions, Unified Communications and Collaboration ("UC&C"), data center, content delivery network ("CDN") and Managed Security services; •IP and Data Services, which include Ethernet, IP, and VPN data networks, including software-defined wide area networks ("SD WAN") based services, Dynamic Connections and Hyper WAN; •Fiber Infrastructure Services, which include dark fiber, optical services and equipment; and •Voice and Other, which includes Time Division Multiplexing ("TDM") voice, private line and other legacy services. Beginning in the first quarter of 2021, we categorize our products and services revenue among the following four categories for the Mass Markets segment: •Consumer Broadband, which includes high speed fiber-based and lower speed DSL-based broadband services to residential customers; •Small Business Group ("SBG") Broadband, which includes high speed fiber-based and lower speed DSL-based broadband services to small businesses; •Voice and Other, which includes primarily local and long-distance services, retail video services (including our linear and TV services), professional services and other ancillary services; and •Connect America Fund ("CAF") II, which consists of Connect America Fund II support payments designed to reimburse us for various costs related to certain telecommunications services. Reconciliation of Total Revenue to Revenue from Contracts with Customers The following table provides total revenue by segment, sales channel and product category. It also provides 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 March 31, 2021 |  | Three Months Ended March 31, 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)
Business Segment by Sales Channel and Product Category |  |  |  |  |  |  |
International and Global Accounts ("IGAM") |  |  |  |  |  |  |
Compute and Application Services | $ | 179 |  | (69) |  | 110 |  |  | 201 |  | (69) |  | 132 |
IP and Data Services | 427 |  | — |  | 427 |  |  | 437 |  | — |  | 437 |
Fiber Infrastructure Services | 216 |  | (30) |  | 186 |  |  | 202 |  | (26) |  | 176 |
Voice and Other | 191 |  | — |  | 191 |  |  | 201 |  | — |  | 201 |
Total IGAM Revenue | 1,013 |  | (99) |  | 914 |  |  | 1,041 |  | (95) |  | 946 |
Large Enterprise |  |  |  |  |  |  |
Compute and Application Services | 165 |  | (15) |  | 150 |  |  | 154 |  | (17) |  | 137 |
IP and Data Services | 395 |  | — |  | 395 |  |  | 401 |  | — |  | 401 |
Fiber Infrastructure Services | 124 |  | (15) |  | 109 |  |  | 138 |  | (10) |  | 128 |
Voice and Other | 253 |  | — |  | 253 |  |  | 273 |  | — |  | 273 |
Total Large Enterprise Revenue | 937 |  | (30) |  | 907 |  |  | 966 |  | (27) |  | 939 |
Mid-Market Enterprise |  |  |  |  |  |  |
Compute and Application Services | 36 |  | (8) |  | 28 |  |  | 34 |  | (8) |  | 26 |
IP and Data Services | 453 |  | (1) |  | 452 |  |  | 466 |  | (1) |  | 465 |
Fiber Infrastructure Services | 60 |  | (2) |  | 58 |  |  | 54 |  | (4) |  | 50 |
Voice and Other | 167 |  | — |  | 167 |  |  | 207 |  | — |  | 207 |
Total Mid-Market Enterprise Revenue | 716 |  | (11) |  | 705 |  |  | 761 |  | (13) |  | 748 |
Wholesale |  |  |  |  |  |  |
Compute and Application Services | 48 |  | (40) |  | 8 |  |  | 46 |  | (40) |  | 6 |
IP and Data Services | 305 |  | — |  | 305 |  |  | 318 |  | — |  | 318 |
Fiber Infrastructure Services | 154 |  | (31) |  | 123 |  |  | 153 |  | (30) |  | 123 |
Voice and Other | 422 |  | (63) |  | 359 |  |  | 452 |  | (68) |  | 384 |
Total Wholesale Revenue | 929 |  | (134) |  | 795 |  |  | 969 |  | (138) |  | 831 |
Business Segment by Product Category |  |  |  |  |  |  |
Compute and Application Services | 428 |  | (132) |  | 296 |  |  | 435 |  | (134) |  | 301 |
IP and Data Services | 1,580 |  | (1) |  | 1,579 |  |  | 1,622 |  | (1) |  | 1,621 |
Fiber Infrastructure Services | 554 |  | (78) |  | 476 |  |  | 547 |  | (70) |  | 477 |
Voice and Other | 1,033 |  | (63) |  | 970 |  |  | 1,133 |  | (68) |  | 1,065 |
Total Business Segment Revenue | $ | 3,595 |  | (274) |  | 3,321 |  |  | 3,737 |  | (273) |  | 3,464 |
Mass Markets Segment by Product Category |  |  |  |  |  |  |
Consumer Broadband | $ | 731 |  | (52) |  | 679 |  |  | 722 |  | (53) |  | 669 |
SBG Broadband | 39 |  | (4) |  | 35 |  |  | 39 |  | (3) |  | 36 |
| Three Months Ended March 31, 2021 |  | Three Months Ended March 31, 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)
Voice and Other | 541 |  | (21) |  | 520 |  |  | 607 |  | (29) |  | 578 |
CAF II | 123 |  | (123) |  | — |  |  | 123 |  | (123) |  | — |
Total Mass Markets Segment | $ | 1,434 |  | (200) |  | 1,234 |  |  | 1,491 |  | (208) |  | 1,283 |
Total revenue | $ | 5,029 |  | (474) |  | 4,555 |  |  | 5,228 |  | (481) |  | 4,747 |
_____________________________________________________________________ (1)Includes regulatory revenue and lease revenue not within the scope of ASC 606. Customer Receivables and Contract Balances The following table provides balances of customer receivables, contract assets and contract liabilities as of March 31, 2021 and December 31, 2020:
| March 31, 2021 |  | December 31, 2020
| (Dollars in millions)
Customer receivables(1) | $ | 1,805 |  |  | 1,889 |
Contract assets | 103 |  |  | 108 |
Contract liabilities | 883 |  |  | 950 |
______________________________________________________________________ (1)Reflects gross customer receivables of $2.0 billion and $2.1 billion, net of allowance for credit losses of $148 million and $174 million, at March 31, 2021 and December 31, 2020, respectively. Contract liabilities are consideration we have received from our customers or billed in advance of providing goods or services promised in the future. We defer recognizing this consideration as revenue until we have satisfied the related performance obligation to the customer. Contract liabilities include recurring services billed one month in advance and installation and maintenance charges that are deferred and recognized over the actual or expected contract term, which typically ranges from one to five years depending on the service. Contract liabilities are included within deferred revenue in our consolidated balance sheets. During the three months ended March 31, 2021, we recognized $425 million of revenue that was included in contract liabilities as of January 1, 2021. During the three months ended March 31, 2020, we recognized $495 million of revenue that was included in contract liabilities as of January 1, 2020. Performance Obligations As of March 31, 2021, our estimated revenue expected to be recognized in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied is approximately $5.2 billion. We expect to recognize approximately 90% of this revenue through 2023, with the balance recognized thereafter. These amounts exclude (i) the value of unsatisfied performance obligations for contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (for example, uncommitted usage or non-recurring charges associated with professional or technical services to be completed), and (ii) contracts that are classified as leasing arrangements that are not subject to ASC 606. Contract Costs The following table provides changes in our contract acquisition costs and fulfillment costs:
| Three Months Ended March 31, 2021
| Acquisition Costs |  | Fulfillment Costs
| (Dollars in millions)
Beginning of period balance | $ | 289 |  |  | 216 |
Costs incurred | 44 |  |  | 37 |
Amortization | (54) |  |  | (37) |
End of period balance | $ | 279 |  |  | 216 |
| Three Months Ended March 31, 2020
| Acquisition Costs |  | Fulfillment Costs
| (Dollars in millions)
Beginning of period balance | $ | 326 |  |  | 221 |
Costs incurred | 49 |  |  | 36 |
Amortization | (55) |  |  | (37) |
End of period balance | $ | 320 |  |  | 220 |
Acquisition costs include commission fees paid to employees as a result of obtaining contracts. Fulfillment costs include third party and internal costs associated with the provision, installation and activation of telecommunications services to customers, including labor and materials consumed for these activities. Deferred acquisition and fulfillment costs are amortized based on the transfer of services on a straight-line basis over the average customer life of approximately 30 months for mass markets and business customers. Amortized fulfillment costs are included in cost of services and products and amortized acquisition costs are included in selling, general and administrative expenses in our consolidated statements of operations. The amount of these deferred costs that are anticipated to be amortized in the next 12 months are included in other current assets on our consolidated balance sheets. The amount of deferred costs expected to be amortized beyond the next 12 months is included in other non-current assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on an annual basis.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 + Details
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