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Revenue Recognition
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
We categorize our products and services and related revenue among the following categories:
•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;
•Voice and Other, which include Time Division Multiplexing ("TDM") voice, private line and other legacy services; and
•Affiliate Services, which include communications services provided to our affiliates that we also provide to our external customers.
From time to time, we may change the categorization of our products and services.

Disaggregated Revenue by Service Offering

The following tables provide disaggregation of revenue from contracts with customers based on service offering for the years ended December 31, 2022, 2021 and 2020. 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 business revenues prior to it being sold on August 1, 2022:
Year Ended December 31, 2022
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services $1,025 (445)580 
IP and Data Services3,405 — 3,405 
Fiber Infrastructure Services 1,560 (221)1,339 
Voice and Other 1,276 (14)1,262 
Affiliate Services227 (227)— 
Total Revenue$7,493 (907)6,586 
Timing of revenue:
Goods transferred at a point in time$4 
Services performed over time6,582 
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)
Compute and Application Services$1,141 (504)637 
IP and Data Services3,555 — 3,555 
Fiber Infrastructure Services1,612 (220)1,392 
Voice and Other1,421 (12)1,409 
Affiliate Services223 (223)— 
Total Revenue$7,952 (959)6,993 
Timing of revenue:
Goods transferred at a point in time$13 
Services performed over time6,980 
Total revenue from contracts with customers$6,993 

Year Ended December 31, 2020
Total Revenue
Adjustments for Non-ASC 606 Revenue (1)
Total Revenue from Contracts with Customers
(Dollars in millions)
Compute and Application Services$1,098 (494)604 
IP and Data Services3,522 — 3,522 
Fiber Infrastructure Services1,507 (209)1,298 
Voice and Other1,598 (8)1,590 
Affiliate Services208 (208)— 
Total Revenue$7,933 (919)7,014 
Timing of revenue:
Goods transferred at a point in time$15 
Services performed over time6,999 
Total revenue from contracts with customers$7,014 
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(1)     Includes lease revenue which is not within the scope of ASC 606.
We do not have any single external customer that comprises more than 10% of our total consolidated operating revenue. Substantially all of our consolidated revenue comes from customers located in the United States.

Customer Receivables and Contract Balances

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, 2022 and 2021:
December 31, 2022December 31, 2021
(Dollars in millions)
Customer receivables (1)
$515 640 
Contract assets (2)
13 35 
Contract liabilities (3)
222 247 
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(1)Reflects gross customer receivables of $534 million and $679 million, net of allowance for credit losses of $19 million and $39 million, as of December 31, 2022 and 2021, respectively. These amounts exclude customer receivables, net, classified as held for sale of $76 million at December 31, 2022 (related to the EMEA business) and $83 million at December 31, 2021 (related to the Latin American business).
(2)These amounts exclude contract assets classified as held for sale of $16 million at December 31, 2022 (related to the EMEA business). There were no contract assets classified as held for sale related to the Latin American business at December 31, 2021.
(3)These amounts exclude contract liabilities classified as held for sale of $59 million at December 31, 2022 (related to the EMEA business) and $58 million at December 31, 2021 (related to the Latin American business).

Contract liabilities are consideration we have received from our customers or billed in advance of providing the goods or services promised in the future. We defer recognizing this consideration 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 and liabilities held for sale in our consolidated balance sheets. During the years ended December 31, 2022 and 2021, we recognized $148 million and $182 million, respectively, of revenue that was included in contract liabilities of $305 million and $385 million as of January 1, 2022 and 2021, respectively, including contract liabilities that were classified as held for sale.

Performance Obligations

As of December 31, 2022, we expect to recognize approximately $4.0 billion of revenue in the future related to performance obligations associated with existing customer contracts that are partially or wholly unsatisfied. We expect to recognize approximately 87% of this revenue through 2025, 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), (ii) contracts that are classified as leasing arrangements that are not subject to ASC 606 and (iii) the value of unsatisfied performance obligations for contracts which relate to our recently completed and planned divestiture of the EMEA business.
Contract Costs

The following tables provide changes in our contract acquisition costs and fulfillment costs for the years ended:
Year Ended December 31, 2022
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$76 99 
Costs incurred61 83 
Amortization(55)(76)
Classified as held for sale (1)
(6)— 
End of period balance$76 106 
Year Ended December 31, 2021
Acquisition CostsFulfillment Costs
(Dollars in millions)
Beginning of period balance$78 122 
Costs incurred58 90 
Amortization(60)(86)
Classified as held for sale (1)
— (27)
End of period balance$76 99 
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(1)     Represents the amounts classified as held for sale related to our planned divestiture. See Note 2—Completed Divestiture of the Latin American Business and Planned Divestiture of European, Middle Eastern and African Business.

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 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 expected contract life of approximately 34 months for our 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 12 months is included in other non-current assets on our consolidated balance sheets. Deferred acquisition and fulfillment costs are assessed for impairment on a quarterly basis.