CONTRACT ASSETS AND LIABILITIES

9 Months Ended

Sep. 26, 2021

Revenue from Contract with Customer [Abstract]

CONTRACT ASSETS AND LIABILITIES

CONTRACT ASSETS AND LIABILITIES

Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract assets and contract liabilities were as follows (in millions):

	September 26, 2021		December 31, 2020
Contract assets	$	12,697	$	9,545
Contract liabilities	7,515		7,545

Contract assets increased $3.2 billion during the nine months ended September 26, 2021, primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the nine months ended September 26, 2021 for which we have not yet billed our customers. There were no significant credit or impairment losses related to our contract assets during the quarters and nine months ended September 26, 2021 and September 27, 2020.

Contract liabilities decreased $30 million during the nine months ended September 26, 2021, primarily due to revenue recognized in excess of payments received on these performance obligations. During the quarter and nine months ended September 26, 2021, we recognized $700 million and $3.9 billion of our contract liabilities at December 31, 2020 as revenue. During the quarter and nine months ended September 27, 2020, we recognized $919 million and $3.5 billion of our contract liabilities at December 31, 2019 as revenue.