Quarterly report pursuant to Section 13 or 15(d)

REVENUE RECOGNITION

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REVENUE RECOGNITION
 3 Months Ended
Mar. 31, 2024
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION
Revenue Recognition
Substantially all of our revenues are from contracts associated with the pickup, transportation and delivery of packages and freight ("transportation services"). These services may be carried out by or arranged by us and generally occur over a short period of time. Additionally, we provide value-added logistics services to customers through our global network of distribution centers and field stocking locations.
The vast majority of our contracts with customers are for transportation services that include only one performance obligation; the transportation services themselves. We generally recognize revenue over time, based on the extent of progress towards completion of the services in the contract. All of our major businesses act as a principal in their revenue arrangements and as such, we report revenue and the associated purchased transportation costs on a gross basis within our statements of consolidated income.
Disaggregation of Revenue
Three Months Ended
 March 31,
2024 2023
Revenue:
Next Day Air $ 2,316  $ 2,461 
Deferred 1,156  1,194 
Ground 10,762  11,332 
     U.S. Domestic Package 14,234  14,987 
Domestic 758  794 
Export 3,350  3,552 
Cargo & Other 148  197 
    International Package 4,256  4,543 
Forwarding 1,280  1,514 
Logistics 1,542  1,410 
Other 394  471 
    Supply Chain Solutions 3,216  3,395 
Consolidated revenue $ 21,706  $ 22,925 
Contract Assets and Liabilities
Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment only when services have been completed (i.e. shipments have been delivered). Amounts do not exceed their net realizable value. Contract assets are generally classified as current and the full balance is converted each quarter based on the short-term nature of the transactions.
Contract liabilities consist of advance payments and billings in excess of revenue as well as deferred revenue. Advance payments and billings in excess of revenue represent payments received from our customers that will be earned over the contract term. Deferred revenue represents the amount due from customers related to in-transit shipments that has not yet been recognized as revenue based on our selected measure of progress. We classify advance payments and billings in excess of revenue as either current or long-term, depending on the period over which the amount will be earned. We classify deferred revenue as current based on the short-term nature of the transactions. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. In order to determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that deferred revenue balance.
Contract assets and liabilities as of March 31, 2024 and December 31, 2023 were as follows (in millions):
Balance Sheet Location
March 31, 2024
 December 31, 2023
Contract Assets:
Revenue related to in-transit packages Other current assets $ 269  $ 237 
Contract Liabilities:
Short-term advance payments from customers Other current liabilities $ 13  $ 20 
Long-term advance payments from customers Other non-current liabilities $ 26  $ 25 
Accounts Receivable, Net
Accounts receivable, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. Losses on accounts receivable are recognized when reasonable and supportable forecasts affect the expected collectability. This requires us to make our best estimate of the current expected losses inherent in our accounts receivable at each balance sheet date. This estimate requires consideration of historical loss experience, adjusted for current conditions, forward looking indicators, trends in customer payment frequency and judgments about the probable effects of relevant observable data, including present and future economic conditions and the financial health of specific customers and market sectors. Our risk management process includes standards and policies for reviewing major account exposures and concentrations of risk.
Our allowance for credit losses as of March 31, 2024 and December 31, 2023 was $144 and $126 million, respectively. Amounts for credit losses charged to expense, before recoveries, during each of the three months ended March 31, 2024 and 2023 were $73 and $43 million, respectively.