Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

The following tables provide disaggregation of revenue from contracts with customers based on service offering for the years ended December 31, 2023, 2022 and 2021. It also shows the amount of revenue that is not subject to ASC 606, but is instead governed by other accounting standards. The amounts in the tables below include the Latin American and EMEA businesses revenues prior to being sold on August 1, 2022 and November 1, 2023, respectively:


	Year Ended December 31, 2023
	Total Revenue		Adjustments for Non-ASC 606 Revenue (1)	Total Revenue from Contracts with Customers
	(Dollars in millions)
Grow	$	3,890	(595)	3,295
Nurture	1,704		(15)	1,689
Harvest	1,068		—	1,068
Other	151		—	151
Affiliate Services	224		(224)	—
Total Revenue	$	7,037	(834)	6,203

Timing of revenue:
Goods transferred at a point in time				$	—
Services performed over time				6,203
Total revenue from contracts with customers				$	6,203


	Year Ended December 31, 2022
	Total Revenue		Adjustments for Non-ASC 606 Revenue (1)	Total Revenue from Contracts with Customers
	(Dollars in millions)
Grow	$	3,960	(665)	3,295
Nurture	1,905		(15)	1,890
Harvest	1,283		—	1,283
Other	118		—	118
Affiliate Services	227		(227)	—
Total Revenue	$	7,493	(907)	6,586

Timing of revenue:
Goods transferred at a point in time				$	4
Services performed over time				6,582
Total revenue from contracts with customers				$	6,586


	Year Ended December 31, 2021
	Total Revenue		Adjustments for Non-ASC 606 Revenue (1)	Total Revenue from Contracts with Customers
	(Dollars in millions)
Grow	$	4,021	(724)	3,297
Nurture	2,087		(12)	2,075
Harvest	1,440		—	1,440
Other	181		—	181
Affiliate Services	223		(223)	—
Total Revenue	$	7,952	(959)	6,993

Timing of revenue:
Goods transferred at a point in time				$	13
Services performed over time				6,980
Total revenue from contracts with customers				$	6,993

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(1) Includes lease revenue which is not within the scope of ASC 606.

Contract with customer, asset and liability

The following table provides balances of customer receivables, contract assets and contract liabilities, net of amounts classified as held for sale as of December 31, 2023 and 2022:


	December 31, 2023		December 31, 2022
	(Dollars in millions)
Customer receivables (1)	$	544	515
Contract assets (2)	8		13
Contract liabilities (3)	222		222

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(1)Reflects gross customer receivables of $557 million and $534 million, net of allowance for credit losses of $13 million and $19 million, as of December 31, 2023 and 2022, respectively. At December 31, 2022 amounts exclude customer receivables, net, classified as held for sale of $76 million related to the EMEA business which was sold November 1, 2023.

(2)At December 31, 2022 these amounts exclude contract assets classified as held for sale of $16 million at related to the EMEA business which was sold November 1, 2023.

(3)At December 31, 2022 these amounts exclude contract liabilities classified as held for sale of $59 million related to the EMEA business which was sold November 1, 2023.

Capitalized contract cost

The following tables provide changes in our contract acquisition costs and fulfillment costs for the years ended:


	Year Ended December 31, 2023
	Acquisition Costs		Fulfillment Costs
	(Dollars in millions)
Beginning of period balance	$	76	106
Costs incurred	55		87
Amortization	(57)		(69)
Change in contract costs held for sale	(4)		(27)
End of period balance	$	70	97


	Year Ended December 31, 2022
	Acquisition Costs		Fulfillment Costs
	(Dollars in millions)
Beginning of period balance	$	76	99
Costs incurred	61		83
Amortization	(55)		(76)
Classified as held for sale(1)	(6)		—
End of period balance	$	76	106

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(1) Represents the amounts classified as held for sale related to the divestiture of our Latin American and EMEA businesses on August 1, 2022 and November 1, 2023, respectively. See Note 2—Divestitures of the Latin American and EMEA Businesses.

Level 3 Parent, LLC 10-K