Trade Accounts Receivable, Unbilled Services and Unearned Income

6 Months Ended

Jun. 30, 2022

Trade Accounts Receivable, Unbilled Services and Unearned Income

Trade accounts receivables and unbilled services consist of the following:


(in millions)	June 30, 2022		December 31, 2021
Billed	$	1,261	$	1,275
Unbilled services	1,446		1,309
Trade accounts receivable and unbilled services	2,707		2,584
Allowance for doubtful accounts	(28)		(33)
Trade accounts receivable and unbilled services, net	$	2,679	$	2,551

Unbilled services and unearned income were as follows:


(in millions)	June 30, 2022		December 31, 2021		Change
Unbilled services	$	1,446	$	1,309	$	137
Unearned income	(1,810)		(1,825)		15
Net balance	$	(364)	$	(516)	$	152

Unbilled services, which is comprised of approximately 61% and 62% of unbilled receivables and 39% and 38% of contract assets as of June 30, 2022 and December 31, 2021, respectively, increased by $137 million as compared to December 31, 2021. Contract assets are unbilled services for which invoicing is based on the timing of certain milestones related to service contracts for clinical research whereas unbilled receivables are billable upon the passage of time. Unearned income decreased by $15 million over the same period resulting in an increase of $152 million in the net balance of unbilled services and unearned income between December 31, 2021 and June 30, 2022. The change in the net balance is driven by the difference in timing of revenue recognition in accordance with ASC 606, Revenue from Contracts with Customers, primarily related to the Company’s Research & Development Solutions contracts (which is based on the percentage of costs incurred) versus the timing of invoicing, which is based on certain milestones.

Bad debt expense recognized on the Company’s receivables and unbilled services was de minimis for the three and six months ended June 30, 2022 and 2021.