Revenue Revenue (Policies)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition, Policy [Policy Text Block]

The amount of consideration we receive and revenue we recognize on our vehicles, parts, and accessories varies with changes in marketing incentives and returns we offer to our customers and their customers. As a result of changes in our estimate of marketing incentives, we recorded a decrease related to revenue recognized in prior periods of $220 million and $350 million in the second quarter of 2018 and 2019, respectively.

We sell separately-priced service contracts that extend mechanical and maintenance coverages beyond our base warranty agreements to vehicle owners (“extended service contracts”). At December 31, 2017 and December 31, 2018, $3.8 billion and $4 billion, respectively, of unearned revenue associated with outstanding contracts was reported in Other liabilities and deferred revenue. We recognized $269 million and $285 million of the unearned amounts as revenue during the second quarter of 2018 and 2019, respectively, and $567 million and $590 million in the first half of 2018 and 2019, respectively. At June 30, 2019, the unearned amount was $4 billion. We expect to recognize approximately $600 million of the unearned amount in the remainder of 2019, $1.1 billion in 2020, and $2.3 billion thereafter.

Amounts paid to dealers to obtain these contracts are deferred and recorded as Other assets. We had a balance of $247 million and $258 million in deferred costs as of December 31, 2018 and June 30, 2019, respectively, and recognized $19 million and $20 million of amortization during the second quarter of 2018 and 2019, respectively, and $37 million and $39 million in the first half of 2018 and 2019, respectively.