Company: GE
Filing Date: 2025-07-21
Form Type: 10-Q
Source: 0000040545-25-000111
Chunk: 63

Company: GENERAL ELECTRIC CO
Filing Date: 2025-07-21
Form: 10-Q
Item: Item 4
Chunk 63
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 30, 2025 and 2024, respectively.

2025 2Q FORM 10-Q 23

NOTE 8. CONTRACT AND OTHER DEFERRED ASSETS, CONTRACT LIABILITIES AND DEFERRED INCOME & PROGRESS COLLECTIONS

Contract assets (liabilities) and other deferred assets (income), on a net basis, increased the net liability position by $364 million for the six months ended June 30, 2025, primarily due to an increase in long-term service agreements liabilities of $387 million. In aggregate, the net liability for long-term service agreements increased primarily due to billings of $4,359 million and net unfavorable changes in estimated profitability of $271 million, including quarterly updates to contract margins and an estimated impact from tariffs, primarily in Commercial Engines & Services, partially offset by revenue recognized of $4,284 million. Revenue recognized for contracts included in a liability position at the beginning of the year were $3,892 million and $3,537 million for the six months ended June 30, 2025 and 2024, respectively.CONTRACT ASSETS, LIABILITIES AND OTHER DEFERRED ASSETS AND INCOMEJune 30, 2025December 31, 2024Long-term service agreements$2,403 $2,374 Equipment and other service agreements656 609 Current contract assets$3,059 $2,982 Nonrecurring engineering costs(a)$2,449 $2,438 Customer advances and other(b)2,354 2,393 Contract and other deferred assets4,803 4,831 Total contract and other deferred assets$7,862 $7,814 Long-term service agreement liabilities$9,381 $8,994 Current deferred income358 359 Contract liabilities and current deferred income$9,738 $9,353 Non-current deferred income1,040 1,013 Total contract liabilities and deferred income$10,778 $10,366 Contract assets (liabilities) and other deferred assets (income)$(2,916)$(2,552)(a) Includes contract fulfillment costs for engineering and development incurred prior to production for equipment production contracts, primarily within our Defense & Propulsion Technologies segment, which are amortized ratably over each unit produced. We assess the recoverability of these costs and if we determine the costs are no longer probable of recovery, the asset is impaired.(b) Includes