XML 21 R10.htm IDEA: XBRL DOCUMENT v3.20.2
Revenue
 9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
The core principle of the revenue recognition guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that principle, the entity applies the following steps: identify the contract(s) with the customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. Under the accounting guidance, a performance obligation is satisfied either at a “point in time” or “over time” depending on the nature of the product or service provided, and the specific terms of the contract with customers.
The Company's revenue recognition guidance is provided in more detail in Note 2 of the consolidated financial statements and the notes thereto included in 2019 Form 10-K for the year ended December 31, 2019.
The following schedule disaggregates components of the Company's revenue:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In millions)2020201920202019
Marsh:
EMEA$536 $536 $1,887 $1,821 
Asia Pacific254 242 790 698 
Latin America93 110 283 304 
Total International883 888 2,960 2,823 
U.S./Canada1,126 1,014 3,271 2,972 
Total Marsh2,009 1,902 6,231 5,795 
Guy Carpenter274 273 1,534 1,328 
 Subtotal2,283 2,175 7,765 7,123 
Fiduciary interest income8 31 40 80 
Total Risk and Insurance Services$2,291 $2,206 $7,805 $7,203 
Mercer:
Wealth$566 $592 $1,719 $1,748 
Health430 441 1,348 1,341 
Career220 247 549 606 
Total Mercer1,216 1,280 3,616 3,695 
Oliver Wyman480 505 1,458 1,563 
Total Consulting$1,696 $1,785 $5,074 $5,258 

The Company recognizes commission revenue from arrangements for a significant portion of its brokerage arrangements at a point in time at effective date of the underlying policy. Commission revenue is estimated using historical information about the risks to be covered over the policy period, some of which are dependent on variable factors such as number of employees covered, covered payroll, airline passenger miles flown, shipped tonnage of marine cargo and others.
The following schedule provides contract assets and contract liabilities information from contracts with customers.
(In millions)September 30, 2020December 31, 2019
Contract Assets$257 $207 
Contract Liabilities$648 $593 
The Company records accounts receivable when the right to consideration is unconditional, subject only to the passage of time. Contract assets primarily relate to quota share reinsurance brokerage and contingent insurer revenue. The Company does not have the right to bill and collect revenue for quota share brokerage until the underlying policies written by the ceding insurer attach to the treaty. Contract assets are included in other current
assets in the Company's consolidated balance sheet. Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in current liabilities in the Company's consolidated balance sheet. Revenue recognized in the first nine months of 2020 and 2019 that was included in the contract liability balance at the beginning of each of those years was $420 million and $378 million, respectively.
The amount of revenue recognized in the first nine months of 2020 and 2019 from performance obligations satisfied in previous periods, mainly due to variable consideration from contracts with insurers, quota share business and consulting contracts previously considered constrained was $84 million and $67 million, respectively.
The Company applies the practical expedient and therefore does not disclose the value of unsatisfied performance obligations for (1) contracts with original contract terms of one year or less and (2) contracts where the Company has the right to invoice for services performed. The revenue expected to be recognized in future periods during the non-cancellable term of existing contracts greater than one year that is related to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period is approximately $46 million for Marsh, $181 million for Mercer and $2 million for Oliver Wyman. The Company expects revenue in 2021, 2022, 2023, 2024 and 2025 and beyond of $123 million, $63 million, $27 million, $13 million and $3 million, respectively, related to these performance obligations.