Company: LIN
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-007990
Chunk: 68

Company: LINDE PLC
Filing Date: 2025-02-26
Form: 10-K
Item: Item 8
Chunk 68
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 is recognized primarily using a cost incurred input method. Costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations. Costs incurred include material, labor, and overhead costs and represent work contributing and proportionate to the transfer of control to the customer. Changes to cost estimates and contract modifications are typically accounted for as part of the existing contract and are recognized as cumulative adjustments for the inception-to-date effect of such change.Contract Assets and LiabilitiesContract assets and liabilities result from differences in timing of revenue recognition and customer invoicing. Contract assets primarily relate to sale of equipment contracts for which revenue is recognized over time. The balance represents unbilled revenue which occurs when revenue recognized under the measure of progress exceeds amounts invoiced to customers. Customer invoices may be based on the passage of time, the achievement of certain contractual milestones or a combination of both criteria. Contract liabilities include advance payments or right to consideration prior to performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied under contract terms. Linde has contract assets of $263 million at December 31, 2024 and $196 million at December 31, 2023, respectively. Total contract liabilities are $2,292 million at December 31, 2024 (current contract liabilities of $1,194 million and $1,098 million within deferred credits in the consolidated balance sheets). Total contract liabilities were $2,950 million at December 31, 2023 (current contract liabilities of $1,901 million and $1,049 million within deferred credits in the consolidated balance sheets).  Revenue recognized for the twelve months ended December 31, 2024 that was included in the contract liability at December 31, 2023 was $993 million. Contract assets and liabilities primarily relate to the Engineering business and customer repayments for certain on-site supply agreements.Payment Terms and OtherLinde generally receives payment after performance obligations are satisfied, and customer prepayments are not typical for the industrial gases business. Payment terms vary based on the country where sales originate and local customary payment practices. Linde does not offer extended financing outside of customary payment terms. Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue producing transactions are presented on a net basis and are not included in sales within the consolidated statement of income.  Additionally, sales returns and allowances are not a normal practice in the industry and are not significant.Disaggregated Revenue InformationAs described above and